I was just skimming through the gloassary to get a feeling for the topics that may be covered in this book.
I added small corrections when I found them. Feel free to use them as suggestions, or leave them be. :)
pull/18/head
Bjarne Magnussen5 years agocommitted byRene Pickhardt
The channel balance is only known by the channel partners.
If the channel balance is completely on one side of the channel, i.e. one channel partner has all of the bitcoin in the channel, this particular partner cannot receive any payments through this channel. This partner can, however, send payments and forward HTLCs.
The balance that a node has on its side of the channel (and is thus able to spend) is called the outbound capacity.
The node's channel partner would refer to that balance its inbound capacity, i.e. the amount that it is able to receive.
The balance that a node has on its own side of the channel (and is thus able to spend) is called the outbound capacity.
The node's channel partner would refer to that balance as its inbound capacity, i.e. the amount that it is able to receive.
Nodes should aim to have balanced channels with similar inbound and outbound capicities.
bech32::
@ -47,7 +47,7 @@ block::
Blockchain::
The blockchain is an irreversible distributed database storing all Bitcoin transactions.
The irreversibility comes from the fact that each group of transactions, or block, is validated by solving a Proof of Work riddle and including the hash of the previous block.
The irreversibility comes from the fact that each group of transactions, referred to as a block, is validated by solving a Proof of Work riddle and including the hash of the previous block.
Thus the data can only be changed by an entity providing more than 51% of the computational power of the Bitcoin network.
Blocks currently have a size limit of 1 MB.
New blocks have a statistical probability of being produced every ten minutes.
@ -56,7 +56,7 @@ BOLT::
BOLT is an acronym for Basics Of Lightning Technology.
The formal specification of the Lightning Network Protocol is called Basics Of Lightning Technology.
It is located at https://github.com/lightningnetwork/lightning-rfc .
This is different to Bitcoin where a the reference implementation bitcoin core serves the purpose of being the specification.
This is different to Bitcoin where the reference implementation bitcoin core serves the purpose of being the specification.
Breach Remedy Transaction::
A transaction claiming the outputs of a Revocable Sequence Maturity Contract with the help of the revocation key.
@ -68,7 +68,7 @@ Capacity::
It does not reveal any information about which of the channel partners owns how much bitcoin in the channel.
A high capacity does not guarantee that the channel can be used for routing in both directions.
The capacity does not change if some of the capacity is locked up in HTLCs.
This means that even a high capacity channel could be unable to route a payment of a certain amount of time in both directions.
This means that even a high capacity channel could at any time be unable to route a payment of a certain amount in both directions.
It is not to be confused with the balance.
c-lightning::
@ -78,7 +78,7 @@ Closing Transaction::
If both channel partners agree to close a channel they will create a spent of the funding transaction that reflects the most recent commitment transaction.
It does not include any Hashed Time Lock Contracts or Revocable Sequence Maturity Contracts.
After exchanging signatures for a closing transaction no further channel updates should be made, as this one allows one side to enforce the closing transaction on the blockchain.
Mutually closing a channel with the help of a closing transaction has the advantage that less blockchain transactions are required to claim all funds, in comparison to unilaterally forcing a channel close by publishing a commitment transaction. Additionally, funds are immediately spendable from a closing transaction.
Mutually closing a channel with the help of a closing transaction has the advantage that less blockchain transactions are required to claim all funds, in comparison to unilaterally forcing a channel close by publishing a commitment transaction. Additionally, funds are for both parties immediately spendable from a closing transaction.
coinbase::
A special field used as the sole input for coinbase transactions. The coinbase allows claiming the block reward and provides up to 100 bytes for arbitrary data.
@ -119,7 +119,7 @@ Contract::
Diffie Hellman Key Exchange::
On the Lightning Network, the Elliptic Curve Diffie-Hellman method is used.
It is an anonymous key agreement protocol that allows two parties, each having an elliptic-curve public–private key pair, to establish a shared secret over an insecure channel.
It is an anonymous key agreement protocol that allows two parties, each having an elliptic-curve public–private key pair, to establish a shared secret over an insecure communication channel.
This shared secret may be directly used as a key, or to derive another key.
The key, or the derived key, can then be used to encrypt subsequent communications using a symmetric-key cipher.
An example of the derived key would be the ephemeral key used by the SPHINX Mix Format.
Doublespending is the result of successfully spending some money more than once.
Bitcoin protects against double-spending by verifying each transaction added to the block chain to ensure that the inputs for the transaction had not previously already been spent.
The Revocable Sequence Maturity Contracts used to construct payment channels heavily attempt to doublespend bitcoin.
Double-spending is the result of successfully spending some money more than once.
Bitcoin protects against double-spending by verifying each transaction added to the blockchain plays by the rules that the inputs for the transaction have not previously already been spent.
The Revocable Sequence Maturity Contracts used to construct payment channels heavily attempt to double-spend bitcoin.
ECDSA::
Elliptic Curve Digital Signature Algorithm or ECDSA is a cryptographic algorithm used by Bitcoin to ensure that funds can only be spent by their rightful owners.
@ -195,12 +195,12 @@ hashlocks::
A hashlock is a type of encumbrance that restricts the spending of an output until a specified piece of data is publicly revealed. Hashlocks have the useful property that once any hashlock is opened publicly, any other hashlock secured using the same key can also be opened. This makes it possible to create multiple outputs that are all encumbered by the same hashlock and which all become spendable at the same time.
HTLC::
A Hashed TimeLock Contract or HTLC is a class of payments that use hashlocks and timelocks to require that the receiver of a payment either acknowledge receiving the payment prior to a deadline by generating cryptographic proof of payment (usually called the preimage of the payment hash) or forfeit the ability to claim the payment, returning it to the payer.
A Hashed TimeLock Contract or HTLC is a class of payments that use hashlocks and timelocks to require that the receiver of a payment either acknowledges receiving the payment prior to a deadline by generating cryptographic proof of payment (usually called the preimage of the payment hash) or forfeits the ability to claim the payment, returning it to the payer.
On the Lightning Network HTLCs are outputs in the commitment transaction of a payment channel and are used to enable the trustless routing of payments.
Invoice::
The Payment process on the Lightning Network is initiated by the payee who issues an invoice.
Invoices include the payment hash, The amount, a description and the expiry time.
Invoices include the payment hash, the amount, a description and the expiry time.
Invoices can also include a fallback Bitcoin address to which the payment can be made in case no route can be found, as well as hints for routing a payment through a private channel.
Lightning Network::
@ -248,10 +248,10 @@ output::
Output, transaction output, or TxOut is an output in a transaction which contains two fields: a value field for transferring zero or more satoshis and a pubkey script for indicating what conditions must be fulfilled for those satoshis to be further spent.
P2PKH::
Transactions that pay a bitcoin address contain P2PKH or Pay To PubKey Hash scripts. An output locked by a P2PKH script can be unlocked (spent) by presenting a public key and a digital signature created by the corresponding private key.
Transactions that pay a bitcoin address can contain P2PKH or Pay To PubKey Hash scripts. An output locked by a P2PKH script can be unlocked (spent) by presenting a public key and a digital signature created by the corresponding private key.
P2SH::
P2SH or Pay-to-Script-Hash is a powerful new type of transaction that greatly simplifies the use of complex transaction scripts. With P2SH the complex script that details the conditions for spending the output (redeem script) is not presented in the locking script. Instead, only a hash of it is in the locking script.
P2SH or Pay-to-Script-Hash is a powerful type of transaction that greatly simplifies the use of complex transaction scripts. With P2SH the complex script that details the conditions for spending the output (redeem script) is not presented in the locking script. Instead, only a hash of it is in the locking script.
P2SH address::
P2SH addresses are Base58Check encodings of the 20-byte hash of a script, P2SH addresses use the version prefix "5", which results in Base58Check-encoded addresses that start with a "3". P2SH addresses hide all of the complexity, so that the person making a payment does not see the script.
@ -266,7 +266,7 @@ Payment::
A payment occurs if we transfer bitcoin within the Lightning Network.
Payments are generally not seen on the blockchain.
The recipient initiates a payment by creating an invoice.
The invoice includes a payment Hash which is the hash of a secret preimage.
The invoice includes a payment hash which is the hash of a secret preimage.
This payment hash is used by the Hashed Time Lock Contracts during the routing process.
payment channels::
@ -275,7 +275,7 @@ payment channels::
Payment Channel::
Payment Channels are the core building blocks of the Lightning Network.
They can be used to send a predefined amount of bitcoin back and forth between two parties.
Sending bitcoins over a payment channel happens off chain, so only the funding transaction and either the commitment or closing transaction are stored in the blockchain.
Sending bitcoins over a payment channel happens off chain, so only the funding transaction and either the commitment or closing transaction is stored in the blockchain.
There are currently three methods known to construct a fully duplex bidirectional payment channel.
Christian Decker proposed a method in his PhD thesis based on invalidation trees.
In the Lightning Network whitepaper, Joseph Poon and Tadge Dryja describe the Revocable Sequence Maturity Contract based method that is currently being implemented on the Lightning Network.
@ -290,7 +290,7 @@ Penalty Transaction::
Preimage::
In mathematics given a function $f$ and a value $h$ the preimage of $h$ with respect to $f$ is the set of values $R = \{r_1,r_2,...\}$ such that $f(r_i) = h$ for all $\r_i \in R$.
In layman's terms, it is the set of values which are mapped to $h$ by the function $f$.
In layman's terms, it is the set of values which is mapped to $h$ by the function $f$.
This preimage set can be empty, finite or infinite.
In cryptography the function $f$ is usually taken to be a hash function.
Cryptographers use the term preimage for an arbitrary element of $R$.
@ -327,7 +327,7 @@ Topology::
The topology of the Lightning Network is publicly broadcasted with the help of the gossip protocol unless nodes decide to act privately.
This means that the Lightning Network is probably larger than the announced number of nodes.
Knowing the topology is of particular interest in the source based routing process of payments in which the sender discovers a route.
Also, the topology is important for features like the autopilot
Also, the topology is important for features like the autopilot.
satoshi::
A satoshi is the smallest denomination of bitcoin that can be recorded on the blockchain. It is the equivalent of 0.00000001 bitcoin and is named after the creator of Bitcoin, Satoshi Nakamoto. ((("satoshi")))
@ -355,7 +355,7 @@ secret key (aka private key)::
----
Segregated Witness::
Segregated Witness is a proposed upgrade to the Bitcoin protocol, which technological innovation separates signature data from bitcoin transactions. Segregated Witness is a proposed soft fork; a change that technically makes Bitcoin’s protocol rules more restrictive.
Segregated Witness is an upgrade to the Bitcoin protocol, which technological innovation separates signature data from bitcoin transactions. Segregated Witness was deployed as a soft fork; a change that technically makes Bitcoin’s protocol rules more restrictive.
SHA::
The Secure Hash Algorithm or SHA is a family of cryptographic hash functions published by the National Institute of Standards and Technology (NIST).
@ -382,9 +382,6 @@ SPHINX Mix Format::
timelocks::
A timelock is a type of encumbrance that restricts the spending of some bitcoin until a specified future time or block height. Timelocks feature prominently in many Bitcoin contracts, including payment channels and hashed timelock contracts.
transaction::
In simple terms, a transfer of bitcoin from one address to another. More precisely, a transaction is a signed data structure expressing a transfer of value. Transactions are transmitted over the bitcoin network, collected by miners, and included in blocks, made permanent on the blockchain.
Transaction::
Transactions are a binary format used by the Bitcoin protocol to transfer bitcoins from one address to another.
Several transactions are built into a block which has to be confirmed by the Bitcoin network through the process of mining.
@ -400,7 +397,7 @@ Transport Layer::
unspent transaction output (UTXO)::
UTXO is an unspent transaction output that can be spent as an input in a new transaction.
UTXO is an unspent transaction output that can be spent as an input to a new transaction.
wallet::
Software that holds all your bitcoin addresses and secret keys. Use it to send, receive, and store your bitcoin.
Bjarne Magnussen
5 years ago
committed by
Rene Pickhardt