@ -139,10 +139,10 @@ As parties are required to deposit the funds used for the payment in escrow, the
However, as discussed earlier, they're compensated for this opportunity cost in the forms of earned routing fees when they successfully forward the payment.
In the next section, we'll dive into the details of the "HTLC", exploring the properties that allow it to implement the concept of a conditional chained end to end secure payment _without_ involving the 3rd party escrow.
You will see that the Bitcoin network acts as the trusted third party or escrow for those HTLCs.
This is true as the HTLCs are created as outputs in this commitment transactions of the payment channels which would be enforced by the Bitcoin network in case some party becomes unresponsive or tries to act in a fraudulent way.
Finally in the last section you will learn how the path of intermediaries is encrypted and hidden from the intermediaries so that they will only know their next hop with whom they should set up an HTLC and deliver the encrypted message that has more forwarding instructions.
This process is called onion routing.
You'll see how the Bitcoin network can be seen as a stand-in for a trusted third party to ensure proper HTLC contract execution.
After that, we'll explore how a user is able to use an HTLC to "route" a payment through the network securely.
In the Lightning Network today, we use a technique called source-based onion routing, though it's also possible to route payment with alternative techniques.
Finally, we'll dive into the precise details concerning the exact mechanics of forward, settle ling, and cancelling HTLCs in the network.
===Hash Time Locked Contracts as a Conditional Chained End to End Secure Payment
Olaoluwa Osuntokun
4 years ago