How do they avoid double spend if it's not on chain?
RE: Bitshares is superior to any other crypto and therefore so is Steem
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Bitshares is superior to any other crypto and therefore so is Steem
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Because blockchain is still used in case of any doubts what is the truth.
To have fully functional lightning network channel, you need to create 2 "commitment transactions"and exchange them between participants. Those commitment transactions set/declare what you will be able to do with your part of your funds, which you will later deposit in your common multisig address. When those commitment transaction are exchanged, channel can be safely open and funded. In case of any doubt everyone who is in the possession of particular commitment transaction, can close a channel to enforce last agreed state.
This is commitment transaction thanks to its design is a guarantee that what ever will happen, you will always be able to register final result of your channel as a single transaction in blockchain.
When you make another transaction in channel, basically you create and exchange new pair of commitment transaction, and if they are ok, you provide a special secret from previous commitment transaction that other side would be able to invalidate your attempt of closing a channel with wrong end result.
Users can make thousands of transactions per second, the only real limitation comes from hardware and Internet Speed. So... transactions are fast, but opening or closing a channel takes time - block time. The truth is, you do not need to create/close channel very often. For example... you probably have a bank account. To create a possibility to deposit or withdraw money from your account, you probably needed to go through some not-so-short procedure.
I made a last week a presentation about LN on Wroclaw Blockchain Meetup. I hope this weekend publish video from this talk.
For me, the most exciting part is... that Lightning Network is a protocol, which can be implemented by multiple parties. There can be hundreds of independent lightning networks build on top of bitcoin. Last month I implemented own LN on... few pieces of paper - (post in Polish, on my 2nd account) :)
Declaimer: I am not a LN expert. I just founded it being very interesting, so I decided to learn more about it.
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They get locked inside one blockchain and released in the other. Therefore secured by all connected blockchains to prevent double spending using multisig and timelocks. At least that is how I came to understand it.
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