@ -126,7 +126,7 @@ Multisignature scripts and addresses are explained in more detail in <<multisig>
The fundamental building block of a payment channel, is a 2-of-2 multisignature address. One of the two channel partners will fund the payment channel by sending bitcoin to the multisignature address. This transaction is called the _funding transaction_, and is recorded on the Bitcoin blockchain. footnote:[While the original Lightning whitepaper described channels funded by both channel partners, the current specification, as of 2020, assumes that just one partner commits funds to the channel. As of May 2021 dual-funded lightning channels are experimental in the c-lightning LN implementation.]
Even though the funding transaction is public, it is not obvious that it is a Lightning payment channel until it is closed. Furthermore, channel payments are still not visible to anyone other than the channel partners, nor is the distribution of the channel balance between them.
Even though the funding transaction is public, it is not obvious that it is a Lightning payment channel until it is closed unless the channel is publicly advertised. Channels are typically publicly announced by routing nodes that wish to forward payments. However, non-advertised channels also exist, and are usually created by mobile nodes that don't actively participate in routing. Furthermore, channel payments are still not visible to anyone other than the channel partners, nor is the distribution of the channel balance between them.
The amount deposited in the multisignature address is called the _channel capacity_ and sets the maximum amount that can be sent across the payment channel. However, since funds can be sent back and forth, the channel capacity is not the upper limit on how much value can flow across the channel. That's because if the channel capacity is exhausted with payments in one direction, it can be used to send payments in the opposite direction again.
Olaoluwa Osuntokun
3 years ago