Yes. You pick a peer and after some setup, create a bitcoin transaction to fund the lightning channel; it’ll then take another transaction to close it and release your funds. You and your peer always hold a bitcoin transaction to get your funds whenever you want: just broadcast to the blockchain like normal. In other words, you and your peer create a shared account, and then use Lightning to securely negotiate who gets how much from that shared account, without waiting for the bitcoin blockchain.
Yes, Lightning is open source. Anyone can review the code (in the same way as the bitcoin code)
Similar to the bitcoin network, no one will ever own or control the Lightning Network. The code is open source and free for anyone to download and review. Anyone can run a node and be part of the network.
No, your bitcoin will never leave the blockchain. Instead your bitcoin will be held in a multi-signature address as long as your channel stays open. When the channel is closed; the final transaction will be added to the blockchain. “Off-chain” is not a perfect term, but it is used due to the fact that the transfer of ownership is no longer reflected on the blockchain until the channel is closed.
Example: A and B have a channel. 1 BTC each. A sends B 0.5 BTC. B sends back 0.25 BTC. Balance should be A = 0.75, B = 1.25. If A gets disconnected, B can publish the first Tx where the balance was A = 0.5 and B = 1.5. If the node B does in fact attempt to cheat by publishing an old state (such as the A=0.5 and B=1.5 state), this cheat can then be detected on-chain and used to steal the cheaters funds, i.e., A can see the closing transaction, notice it's an old one and grab all funds in the channel (A=2, B=0). The time that A has in order to react to the cheating counterparty is given by the CheckLockTimeVerify (CLTV) in the cheating transaction, which is adjustable. So if A foresees that it'll be able to check in about once every 24 hours it'll require that the CLTV is at least that large, if it's once a week then that's fine too. You definitely do not need to be online and watching the chain 24/7, just make sure to check in once in a while before the CLTV expires. Alternatively you can outsource the watch duties, in order to keep the CLTV timeouts low. This can be achieved both with trusted third parties or untrusted ones (watchtowers). In the case of a unilateral close, e.g., you just go offline and never come back, the other endpoint will have to wait for that timeout to expire to get its funds back. So peers might not accept channels with extremely high CLTV timeouts. -- Source
Tiny payments are possible: since fees are proportional to the payment amount, you can pay a fraction of a cent; accounting is even done in thousandths of a satoshi. Payments are settled instantly: the money is sent in the time it takes to cross the network to your destination and back, typically a fraction of a second.
Yes, but not in theory. You could make a poorer lightning network without it, which has higher risks when establishing channels (you might have to wait a month if things go wrong!), has limited channel lifetime, longer minimum payment expiry times on each hop, is less efficient and has less robust outsourcing. The entire spec as written today assumes segregated witness, as it solves all these problems.
No, for now. For the first version of the protocol, if you wanted to send a normal bitcoin transaction using your channel, you have to close it, send the funds, then reopen the channel (3 transactions). In future versions, you and your peer would agree to spend out of your lightning channel funds just like a normal bitcoin payment, allowing you to use your lightning wallet like a normal bitcoin wallet.
Not really. Anyone can set up a node, and so it’s a race to the bottom on fees. In practice, we may see the network use a nominal fee and not change very much, which only provides an incremental incentive to route on a node you’re going to use yourself, and not enough to run one merely for fees. Having clients use criteria other than fees (e.g. randomness, diversity) in route selection will also help this.
Lightning is already being tested on the Mainnet Twitter Link but as for a specific date, Jameson Lopp says it best
Nope, because there is no custody ever involved. It's just like forwarding packets. -- Source
Furthermore, the Lightning Network scales not with the transaction throughput of the underlying blockchain, but with modern data processing and latency limits - payments can be made nearly as quickly as packets can be sent. -- Source
Each exchange will get to decide and need to implement the software into their system, but some ideas have been outlined here: Google Doc - Lightning Exchanges
Note that by virtue of the usual benefits of cost-less, instantaneous transactions, lightning will make arbitrage between exchanges much more efficient and thus lead to consistent pricing across exchange that adopt it. -- Source
According to Rusty's calculations we should be able to store 1 million nodes in about 100 MB, so that should work even for mobile phones. Beyond that we have some proposals ready to lighten the load on endpoints, but we'll cross that bridge when we get there. -- Source
No you'd remember the information from the last time you started the app and only sync the differences. This is not yet implemented, but it shouldn't be too hard to get a preliminary protocol working if that turns out to be a problem. -- Source
Lightning is based on participants in the network running lightning node software that enables them to interact with other nodes. This does not require being a full bitcoin node, but you will have to run "lnd", "eclair", or one of the other node softwares listed above.
All lightning wallets have node software integrated into them, because that is necessary to create payment channels and conduct payments on the network, but you can also intentionally run lnd or similar for public benefit - e.g. you can hold open payment channels or channels with higher volume, than you need for your own transactions. You would be compensated in modest fees by those who transact across your node with multi-hop payments. -- Source
Sure, you can help write up educational material. You can learn and read more about the tech at http://dev.lightning.community/resources. You can test the various desktop and mobile apps out there (Lightning Desktop, Zap, Eclair apps). -- Source
No -- Source
lit doesn't depend on having your own full node -- it automatically connects to full nodes on the network. -- Source
LND uses a light client mode, so it doesn't require a full node. The name of the light client it uses is called neutrino
Upon opening a channel, the two endpoints first agree on a reserve value, below which the channel balance may not drop. This is to make sure that both endpoints always have some skin in the game as rustyreddit puts it :-)
For a cheat to become worth it, the opponent has to be absolutely sure that you cannot retaliate against him during the timeout. So he has to make sure you never ever get network connectivity during that time. Having someone else also watching for channel closures and notifying you, or releasing a canned retaliation, makes this even harder for the attacker. This is because if he misjudged you being truly offline you can retaliate by grabbing all of its funds. Spotty connections, DDoS, and similar will not provide the attacker the necessary guarantees to make cheating worthwhile. Any form of uncertainty about your online status acts as a deterrent to the other endpoint. -- Source
You typically want to have more than one channel open at any given time for redundancy's sake. And we imagine open and close will probably be automated for the most part. In fact we already have a feature in LND called autopilot that can automatically open channels for a user.
Frequency will depend whether the funds are needed on-chain or more useful on LN. -- Source
You don't really set up a "node" in the sense that anyone with more than one channel can automatically be a node and route payments. Fees on LN can be set by the node, and can change dynamically on the network. -- Source
Yes but it has to be implemented in the Lightning software being used. -- Source
You won't have to do anything. With autopilot enabled, it'll automatically open and close channels based on the availability of the network. -- Source
"I worked on Bitcoin for a long time before I found something that would not be able to be used in a manner that was anonymous."First, having Bitcoin participants be 'anonymous' is literally on the first announcement from Satoshi.
"I designed Bitcoin to create an immutable evidence trail, money that is private and yet does not suffer the fate of Gyges. Anonymity is a curse. Nothing good comes of it."
"If a solution was found [to avoid creating a public graph of every transaction], a much better, easier, more convenient implementation of Bitcoin would be possible."I mean, he conclusively states that the only reason for the 'public ledger' is to prevent double-spends:
"It's the need to check for the absence of double-spends that requires global knowledge of all transactions."A couple messages later he says:
"What we need is a way to generate additional blinded variations of a public key ... Then you need to be able to sign a signature such that you can't tell that two signatures came from the same private key. I'm not sure if always signing a different blinded public key would already give you this property. If not, I think that's where group signatures comes in. With group signatures, it is possible for something to be signed but not know who signed it."So, Satoshi was highly interested in transaction anonymity and leaving out 'immutable evidence trails'. This is basically how Monero works.
"As an example, say some unpopular military attack has to be ordered, but nobody wants to go down in history as the one who ordered it. If 10 leaders have private keys, one of them could sign the order and you wouldn't know who did it."
submitted by MoonTrader_io to Moontrader_official [link] [comments]
Talk The Trader Talk: A Journey Into The Realm Of Trader SlangSlang is a natural evolution of a language under working conditions. Every industry has its own slang vocabulary, which may or may not be composed of morphologies of words directly related to the job. Sometimes situations related to the job may evolve or devolve into adjectives, verbs, nouns of even completely new words that reflect the object in question. To the uninitiated, such terms may sound like gibberish and could well resemble the talk of thugs that has been so vividly presented many times over in television series and movies.
Whether it is pidgin, slang, argot, or a dialect, industries have their own ways of expressing their ins and outs. For instance, the exhaust system of automobiles is often called the "puffer" among mechanics, a "fat finger" is a larger than intended trade among bankers, a "gat" is a weapon among street gangs, and "all day" is a life sentence among prisoners. The lists of slang terms are endless and are an extremely interesting read.
The Trader LingoTo make sure that MoonTrader users get into the feel of what it is like to be part of the crypto market, we have compiled a comprehensive summary of some of the most widespread slang terms used by traders. Knowing these terms is an important part of working on an exchange, as understanding what traders are talking about is half the job of becoming one of them and being able to delve into the processes taking place. To talk the talk and walk the walk, traders must understand each other and, most importantly, shorten their speech into a mixture of phrases comprehensible only for the initiated and mystical to outsiders.
Babysitting: A slang term used by traders all over the world from Wall Street to the most obscure exchanges in Africa. The term means holding a trade that has been losing out for a while in hopes that it will gain in price, usually in vain. For example: “You’ve been babysitting that option for way too long, it’s a hopeless cause.”
Crunching: A situation in which a stock’s or asset’s price starts falling rapidly and has no support levels. For example: “The XXX stock is going down the drain. It’s crunching, leave it!”
Jig Out: This is a situation when the market makes a sudden turn for the worse and an investor or trader loses out as a result. For example: “The YYY stock jigged out on me today. Lost half a mil.”
Learning Curve: A fairy common expression meaning the amount of time and effort someone, such as a budding new trader, has to put into something to master the art and “learn the ropes”. For example: “The learning curve for Forex is pretty steep.”
Melt: Another fairly common expression that can be encountered in the world of finance, which signifies that a lot of money has been lost and an account has been depleted. For example: “My account melted through today after the market jigged me out on that nut.”
Nut: While nuts may be tasty as a snack or very useful for keeping things bound together with bolts, in trading a nut is the total amount of commissions that have to be paid for a certain trade. For example: “The nut on ZZZ is crazy these days.”
Permabull / Permabear: Since bullish markets are positive and bearish markets are sleepy, the traders working on such a market are called bulls or bears. There are some optimists who believe that such markets are always there. These traders are called permabulls. The opposite are permabears. For example: “Even if the market is dead and floating, he will still act like a permabull”.
Printing on the “O”: If we consider that O is an extreme abbreviation of the term “Override”, then the phrase means that the price of an asset is below the bid price and there is an urgent need to sell it. “XYZ is printing on the Os all day!”
ScalpeScalping: The idea of scalping is opening hundreds and thousands of small trades in a short amount of time in hopes of generating a large amount of small profits. Scalpers are traders who engage in scalping. For example: “He’s a heck of a scalper.”
Slippage: A common situation for inexperienced traders who lose on assets that are insoluble and cause losses due to higher or lower prices. For example: “He’s been slipping on ZZZ for three weeks in a row.”
Squiggly Lines: Technical analysis consists of graphs and indicators that traders use to make sense of market dynamics. The lines on graphs are never straight, which would mean that the market is comatose, thus they are called squiggly, or uneven lines. For example: “I’ve been staring at the squiggly lines all day and my eyes are popping out.”
Tank: A tank is not only a military machine or a container, but also a verb, which could either mean to fill something up, like a container or a stomach, and also a drop. In this case, tanking means a market collapse. For example: “The market’s tanking! All is lost! All is lost!”
Unicorn, Vulture, Whale: The trading terminology bestiary is full of terms that have gained animalistic form. A unicorn is a situation reminiscent of the mythical beast, when a startup has reached a $1 billion valuation. A vulture is a trader who preys on falling assets and buys them up in hopes that they will rise in the future. A whale is a holder of a large amount of capital or an asset.
Stick: The US dollar has a lot of synonyms from bucks and dough to aces and greenbacks. The stick is another synonym for the US currency used in trading. For example: “Made a K load of sticks today trading XYZ.”
Whack: A fairy straightforward term meaning that a trader has lost a fair amount of money. For example: “I got whacked trading ZZZ the other day.”
Bottom Fishing: There are traders and there are speculators. When a market has “tanked”, assets usually cost much lower and a certain breed of traders emerges who start buying up assets that have lost in value in hopes of selling them off at higher prices later. Such actions are called bottom fishing, or scooping up assets that have floated to the surface of a market like dead fish after a bomb goes off underwater. For example: “The market has sunk today and the sharks are bottom fishing.”
Choppiness: The market is never a calm place and its trials and tribulations are often compared to storms and waves. Since waves can be choppy, or rough in terms of the height of their crests, it is fair to compare market volatility to wavy seas. For example: “The choppiness of the market is not allowing institutional investors to enter with their capital.”
Dark Pools: There is always liquidity on the market that is hid away from average traders. Such liquidity is called a dark pool, which is usually in the hands of special groups. In essence, these are trading volumes created by orders placed by institutional investors. For example: “The dark pools are buying up Bitcoins real quick.”
Dead Cat Bounce or Rubber Band Effect: Since markets are unpredictable, it is often possible for markets to suddenly rebound after seeming dead for a long time. Such a situation is called a dead cat bounce, or a rubber band effect, which is quite figurative in itself. For example: “The market is preparing for a possible dead cat bounce after the recent wave of news.”
Hodl: A bastardization of the term Hold, misspelled by a drunk BitcoinTalk user, which simply means holding an asset in hopes that it will rise in price. For example: “Hodl Bitcoin! Hodl it!”
Short squeeze: There are situations when an asset suddenly rises in price and forces traders to close their positions. For example: “The holders were forced to short squeeze after the price of ZZZ suddenly spiked”.
Resistance Zone: In technical analysis, this is the area between the current support and resistance areas. Prices usually start resisting other prices in such areas and may start falling. For example: “The resistance area of $120 has been reached for ZZZ and we can expect a decline to areas of $100.”
Fallen Angel: Assets that may have reached price heaven are not guaranteed to stay there and it often happens that a highly valued asset has suddenly lost in price. Usually, this biblical analogy refers to high yielding bonds that once had investment grades. For example: “ZZZ has turned into a fallen angel after the US introduced sanctions against country YYY.”
Fat Tail: In statistics, such cases are called outliers and signify that a value has moved away from the mean and has gained a high degree of riskiness. For example: “ZZZ is showing fat tails and will soon reach non-investment levels.”
Flavor: Given the abundance of types of orders and assets on the market, traders often do not distinguish between them and simply call them different flavors. For example: “How about some ZZZ flavor?”
Hit The Bid: A rather straightforward expression meaning that someone has decided to sell an asset. For example: “The price just hit the low, so go and hit the bid”.
Odd Lot: A lot is usually considered to be a million dollars. An odd lot is anything under a million dollars. For example: “I sold that odd lot of ZZZ yesterday.”
Smoke And Mirrors: The poetic expression has made its way onto the market and means that a corporate entity is distorting the market image in hopes of attaining its own goals, usually to make an asset seem more attractive. For example: “The market is all smoke and mirrors after ZZZ flushed its stocks on.”
The list of trading slang terms is endless in its variety and the only way to fully immerse one’s self into it is trading actively and gaining experience. Years of work on any market in any industry will eventually saturate a participant’s mind with the necessary skills and terminology turn any greenhorn into a pro.
Check us out at https://moontrader.io
Originally posted on our blog.
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