<p>While Lightning Network payments are off-chain, they are not really removed from the blockchain. In fact, payments on the Lightning Network are merely creatively delayed Bitcoin transactions. </p>

<p>The funds of a payment channel are held in a 2-of-2 multisig address. Since spending money from there requires the acquiescence of both parties, the payment channel partners can set the payout conditions in advance and then rely on them remaining unchanged.</p>

<p>However, they may renegotiate the payouts with each other in order to adjust the respective balances. Since this process only involves the two of them, it is practically instantaneous and by the order of the negotiation protocol still trustless. If the negotiation fails, or one of the channel partners becomes unresponsive, either channel partner can simply broadcast the latest state of the channel to the blockchain for execution.</p>

<p>While LN has different security trade-offs and a different network topology, I don't think that  "compromising security and decentralization" is an accurate description.</p>

CC BY-SA 4.0
2018-05-06T05:48:59.263Z
Thanks Murch. I understand that the transaction is settled finally on the Blockchain however all intermediate series of transactions goes offchain exposing itself to security attacks.
user2203937
CC BY-SA 4.0
2018-05-06T06:35:14.873Z
@user2203937: Could you please describe the attacks that become possible due to the LN payments being offchain? I'd like to try to address them when I know what you are referring to.
Murch
CC BY-SA 4.0
2018-05-05T19:59:13.523Z
2018-05-05T19:59:13.523Z
Murch
<p>BTC can't do transaction in 1/4000 times to what VISA does and then still claims that it will disrupt industry. The proof of work has limitations to scalability and in no way it can record transaction within one sec. To overcome this, segwit and lightning network is proposed but Segwit is not the solution as it will still take 10 mins minimum to process transaction with segwit....and lightning is not based on blockchain...eventually creating payment channels that can be done without POW and blockchain. So its moving back to traditional way of transferring money in the name of off-chain. There will be security and centralization issue again with LN. If I have to do off chain work without POW, I have already that option available with VISA and others. Why should I go for BTC? I do not see LN as any improvement but it is convenient option to do away with POW only and is more like a hack. </p>

<p>Is Lightning network really a hope for better scalability and low latency? Is it not moving away from blockchain thereby compromising security and decentralization?</p>

CC BY-SA 4.0
2018-05-06T01:44:06.337Z
It is perhaps worth considering that BTC and VISA are not competitors in some sort of winner take all battle. The VISA network currently operates by using fiat currencies as the underlying asset being traded by users, but I see no reason it could not be adapted to use BTC as the underlying asset (essentially, creating another off-chain tx system that VISA operates).
chytrik
<blockchain><security><lightning-network>
Is Lightning network really a hope for better scalability and low latency?
user2203937
# Is Lightning network really a hope for better scalability and low latency?

(Asked by: username_0 on 2018-05-05)

BTC can't do transaction in 1/4000 times to what VISA does and then still claims that it will disrupt industry. The proof of work has limitations to scalability and in no way it can record transaction within one sec. To overcome this, segwit and lightning network is proposed but Segwit is not the solution as it will still take 10 mins minimum to process transaction with segwit....and lightning is not based on blockchain...eventually creating payment channels that can be done without POW and blockchain. So its moving back to traditional way of transferring money in the name of off-chain. There will be security and centralization issue again with LN. If I have to do off chain work without POW, I have already that option available with VISA and others. Why should I go for BTC? I do not see LN as any improvement but it is convenient option to do away with POW only and is more like a hack.

Is Lightning network really a hope for better scalability and low latency? Is it not moving away from blockchain thereby compromising security and decentralization?

**Tags:** blockchain, security, lightning-network

> **Comments:**
> **username_1**: It is perhaps worth considering that BTC and VISA are not competitors in some sort of winner take all battle. The VISA network currently operates by using fiat currencies as the underlying asset being traded by users, but I see no reason it could not be adapted to use BTC as the underlying asset (essentially, creating another off-chain tx system that VISA operates).  

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## 1 answers

### Answer by username_2 on 2018-05-05. Score: 1

While Lightning Network payments are off-chain, they are not really removed from the blockchain. In fact, payments on the Lightning Network are merely creatively delayed Bitcoin transactions.

The funds of a payment channel are held in a 2-of-2 multisig address. Since spending money from there requires the acquiescence of both parties, the payment channel partners can set the payout conditions in advance and then rely on them remaining unchanged.

However, they may renegotiate the payouts with each other in order to adjust the respective balances. Since this process only involves the two of them, it is practically instantaneous and by the order of the negotiation protocol still trustless. If the negotiation fails, or one of the channel partners becomes unresponsive, either channel partner can simply broadcast the latest state of the channel to the blockchain for execution.

While LN has different security trade-offs and a different network topology, I don't think that "compromising security and decentralization" is an accurate description.

> **Comments:**
> **username_0**: Thanks username_2. I understand that the transaction is settled finally on the Blockchain however all intermediate series of transactions goes offchain exposing itself to security attacks.  
> **username_2**: @username_0: Could you please describe the attacks that become possible due to the LN payments being offchain? I'd like to try to address them when I know what you are referring to.  

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