Watchtowers are a security service on the Lightning network that monitors payment channels for potential protocol breaches.
In the case that one of the channel partners goes offline or loses their backup, a watchtower keeps their own backups and can restore their channel information.
They also monitor the Bitcoin blockchain and can submit a penalty transaction in the case that one of the partners tries to "cheat" by broadcasting an outdated state. Watchtowers can be run by the channel partners themselves, or as a paid service offered by a third party. Watchtowers have no control over the funds in the channels themselves.
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They also monitor the Bitcoin blockchain and can submit a penalty transaction in the case that one of the partners tries to "cheat" by broadcasting an outdated state. Watchtowers can be run by the channel partners themselves, or as a paid service offered by a third party. Watchtowers have no control over the funds in the channels themselves.
Some contributed definitions have been sourced under a CC-BY license from the https://en.bitcoin.it/wiki/Main_Page[Bitcoin Wiki], https://en.wikipedia.org[Wikipedia], https://github.com/bitcoinbook/bitconbook[Mastering Bitcoin] or from other open source publications.