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RE: What is the Lightning Network

in #cryptocurrency7 years ago

Negative fees for moving lightning funds from too-well-funded lightning hubs to the not-so-well-funded lightning hubs, yes, but to close the channel it's needed to pay the fee for the on-chain transaction, and that fee will never be negative. What happens if the channel cannot be closed due to lack of blockchain capacity?

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Opening a payment channel requires two parties, but a payment channel can be unilaterally closed by either one. So in this case, the economic incentive to close the payment channel is on the person who has received more funds through the channel rather than on the one who has spent money. Basically, as long as one account has enough money to pay for the payment channel to close, everything should be alright.

The interesting edge case is when neither party has enough funds to close the payment channel. In this case, if I understood correctly, the payment channel will simply time out, and all the funds will be returned to the original state, as they were before the channel was open. Minus, of course, the payment channel opening fee that one of the participants has paid.

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