WHAT IS HASH TIMELOCK CONTRACTS

---

Source

---

Cryptocurrencies have a few really distinctive characteristics. Anyone can use them to send value around the world without the help of a third party because they are difficult to hack or shut down.

Important trade-offs must be made in order to keep these qualities. Throughput is constrained since a cryptocurrency network requires the operation of numerous nodes. As a result, for a technology that seeks to be widely adopted, the number of transactions per second (TPS) that a blockchain network can process is very low.

A hash timelock contract, or HTLC, is that mechanism. Although the phrase may seem intimidating, it's actually a very simple idea to comprehend. Hashlocks and timelocks are combined with two other technologies to address any problematic payment channel behavior.

A hashlock is a restriction put on a transaction that says you can only spend money after demonstrating that you are aware of a secret. A piece of data is hashed by the sender and included in the transaction to the recipient. Only the original data (the secret) that matches the hash can be provided by the receiver in order for it to be spent. And the sender must provide them that information in order for them to offer it.

A timelock is a restriction that forbids you from using money prior to a specific time. Either a real time or a certain block height is supplied.

By combining hashlocks with timelocks, HTLCs are produced. In reality, conditional payments can be made using HTLCs; the recipient must divulge a secret before a deadline or the sender may recoup the money. Let's return to Alice and Bob so that we may illustrate the next section with an example.

_{https://academy.binance.com/en/articles/what-is-lightning-network}