Update ch01.asciidoc

pull/107/head
Imran 5 years ago
parent 9506aaf94a
commit f301d056fb

@ -39,17 +39,17 @@ While the Lightning Network was initially conceived for Bitcoin, it is able to b
* Blockchain: a single distributed ledger agreed upon by a network of participating nodes. The Lightning Network does not use a blockchain to transact, but requires transactions recorded in a blockchain in order for Bitcoin to enter and leave the network.
* Channel: a channel is a financial relationship between two nodes on the Lightning Network. Two users can open a channel with each other using a Bitcoin transaction, and transact with each other by moving Bitcoin from one side of the channel to the other.
* Capacity: channels require Bitcoin to be pre-loaded into them before they can be used. This becomes the maximum amount of Bitcoin that can be transacted using this channel i.e. it's capacity.
* In-Bound Capacity: the maximum amount of Bitcoin that can be received using a channel. Your in-bound capacity is increased when a user opens a channel with you, or you make a payment to another user.
* Out-Bound Capacity: the maximum amount of Bitcoin that can be sent using a channel. Your out-bound capacity is increased when you open a channel with another user, or you receive a payment from another user.
** In-Bound Capacity: the maximum amount of Bitcoin that can be received using a channel. Your in-bound capacity is increased when a user opens a channel with you, or you make a payment to another user.
** Out-Bound Capacity: the maximum amount of Bitcoin that can be sent using a channel. Your out-bound capacity is increased when you open a channel with another user, or you receive a payment from another user.
* Invoice: a request for payment from another user that can take the form of a text string or a QR code. Lightning Invoices can be specified with a description and an amount the invoicer is requesting.
* Node: a node is a participant on the Lightning Network. Nodes can open and close channels with each other, route payments from other nodes, and manage their own wallets. Typically a Lightning Network node user will also run a Bitcoin Node to keep track of the status of on-chain payments
* On-Chain/Off-Chain: a payment is considered "on-chain" if it is included in the Bitcoin (or other underlying) blockchain where it is publicly visible to all nodes. Payments that are not visible in the underlying blockchain are "off-chain"
* Route: when making a payment from one user to another, the payment will move along many intermediary nodes before reaching the receiver. This path from the sender to the receiver forms a route on the network.
* Routing fees: each intermediary node will request a fee for transmitting the payment. The sum of these are the routing fees paid by the sender
** Routing fees: each intermediary node will request a fee for transmitting the payment. The sum of these are the routing fees paid by the sender
* Transaction: a payment from one user to another. Lightning Network transactions are Bitcoin transactions not yet recorded on the Bitcoin blockchain.
* Funding Transaction: a transaction that locks Bitcoin into a smart contract to open a channel.
* Settlement Transaction: a transaction that closes a channel, and allocates the locked Bitcoin to the channel owners according to the final balance of the channel.
* Penalty Transaction: if one user tries to "cheat" by claiming a prior state of the channel, the other user can publish a penalty transaction to the Bitcoin blockchain, which allocates all Bitcoin in that channel to them.
** Funding Transaction: a transaction that locks Bitcoin into a smart contract to open a channel.
** Settlement Transaction: a transaction that closes a channel, and allocates the locked Bitcoin to the channel owners according to the final balance of the channel.
** Penalty Transaction: if one user tries to "cheat" by claiming a prior state of the channel, the other user can publish a penalty transaction to the Bitcoin blockchain, which allocates all Bitcoin in that channel to them.
* Wallet: an application that manages private keys in order to send and receive Bitcoins. Lightning Wallets have additional features over and above Bitcoin Wallets in that they can open and close channels, and send and receive lightning payments.

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