►
Description
In the 7th Episode of our 'Whiteboard Series with NEAR' we had Daniel Robinson (https://twitter.com/danrobinson) from Paradigm (https://twitter.com/paradigm) speaking with our Co-Founder Alex Skidanov (https://twitter.com/AlexSkidanov)
Learn more about Interledger here: https://interledger.org/
Download the video here: https://near.ai/52553
------- About Whiteboard Series ---------
The Whiteboard Series with NEAR is a set of video interviews with Founders who are building scalable solutions for Blockchain. We deep dive into their story, what they're developing and how it is helping the ecosystem.
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#WhiteboardSeries #FutureIsNEAR #Interledger
B
Yeah
sure
so
I
am
a
research
partner
at
paradigm,
I,
work
on
sort
of
research
and
keeping
up
with
developments
in
the
space
and
one
of
the
projects
that
I've
been
excited
about,
not
affiliated
with
it.
Anyway,
it
was
called
inner
ledger
and
the
yeah
I
mean
I've
been
going
around
specifically
talking
about
some
components
of
it,
but
I
think
figure
will
give
a
high-level
talk
about
what
integer
is
and
how
it
works
and
then
get
in
some
of
the
details
about
how
it
differs
specifically
from,
for
example,
the
Lightning
Network
and.
B
Yeah
so
indeed
loads,
you
can
think
of
any
ledger
as
a
peer
network
as
a
solution
for
payments,
where
one
party
can
send
a
payment
to
another
party
when
they
don't
individually,
have
a
particular
credit
relationship
with
himself
so
chronically.
If
we
want
Alice
to
make
a
payment,
let's
say
to
Charlie.
So
this
is
because
you
know
Charlie's,
a
vendor
or
Alice
just
wants
to
sort
of
transfer
money
to
to
him.
But
Charlie
doesn't
trust
Alice,
so
Charlie
isn't
willing
to
say,
extend
credit
to
Alice.
B
So
suppose
we
have
another
party
Bob
and
Bob
and
Alice
have
a
a
relationship.
Credit
relationship
say
and
Bob
and
Charlie
have
a
credit
relationship
and
again
we're
good
we'll
get
into
what
this
relationship
is,
and
it
may
be
a
credit
relationship
or
maybe
something
like
a
payment
channel,
and
that's
where
you
got
this
a
similarity
slighting.
But
this
is
so
far
a
very
abstract,
generalized
view
of
that.
This
is
just
that
Alice
has
the
capability
to
pay
Bob.
B
B
And
here
you
know,
if
you
have
a
major
player
like
coin
based
over
here
and
cracking
over
here.
That
could
be.
You
know
it's
unlikely
that
maybe
Alice
and
Charlie
both
have
relationships
with
with
some
random
person
Bob,
but
it's
very
plausible
that
Alice
may
have
an
account
say:
a
Krakken
or
a
payment
channel
with
Kraken
Charlie
may
have
a
payment
channel
with
coinbase
and
Kraken
and
coinbase
may
have
a
payment
channel
or
a
relationship
with
each
other.
That
allows
then
Alice
to
make
payments
of
Charlie.
B
So
this
you
know
the
the
inspiration
behind
the
analogous
protocol
is
largely
based
on
the
Internet
and
sort
of
the
development
of
these
of
these
packet-switched
data
networks.
And
so
anybody,
just
as
an
internet
where,
instead
of
Alice
sending
just
data
to
Charlie
going
across
a
series
of
ISPs
alice,
is
sending
a
payment
to
charlie
and
it's
being
routed
across
these
intermediate
nodes
and
those.
A
B
And
so,
if
you
do
something
like
lightning
Network
does
it
really
has
to
be
a
cryptocurrency,
and
it
really
has
to
be
a
cryptocurrency
that
supports
this
primitive
call
down
hash
time-lock
contracts
and
also
supports
payment
channels
and
embedding
hash
Toronto
my
contracts
HDL
sees
within
those
and
we'll
get
to
what
those
are,
but
in
inter
ledger,
you
can
really
think
of
it's
like
completely
abstractly.
So
this
is
you
know
this
could
be
just
like
a
3
USD
payment,
and
this
could
be
then,
let's
take
out
a
little
fee.
B
So,
like
you
know,
$2.99,
and
then
this
is
298.
You
know
so
here
the
the
payment
could
be
done
in
dollars
over
a
over
again
like
it
could
be
over
venmo.
It
could
be
just
a
trust.
Relationship
like
this
is
Alice
changing
your
cracking
balance
and
there's
ways
to
make
this
atomic
or
as
atomic
as
we
need
it
to
be,
that
prevent,
for
example,
if
Alice
makes
his
payment
to
Kraken
that
prevents
cracking
from
just
keeping
the
money
rather
than
sending
it
on,
and
so
we'll
get
to
that.
B
But
just
so
you
know
I
wanted
whatever.
Is
it
really?
Is
it
a
interreligious
starts
at
a
very
high
level
of
abstraction,
I,
usually
use
payment
channels
when
I'm
explaining
the
it,
because
in
part,
that
sort
of
makes
the
analogy
to
lightning
Network
clear,
but
it
really
is
much
more
sort
of
general
than
that
and
I
think
you'll
sort
of
see
why,
when
we
talk
about
how
they
accomplished
atom,
SAT
right.
B
So
there's
two
parties
involved
so,
like
you
know
hey,
this
might
be
here
like
charlie,
the
recipient
by
revealing
a
hash
preimage.
So
that's
a
secret
that
the
recipient
knows
that.
The
that
the
sender
doesn't
know
the
sender
is
able
to
reveal,
and
in
exchange
the
hdl-c
will
just
give
them
the
money,
and
this
is
when
you
do
one
on
chain,
for
example,
and
the
alternative
way
it
can
be
spent
is
it
can
be
unlocked?
B
Is
the
sender
can
unlock
it
after
a
timeout
and
so
the
principle
of
an
HDL
see
when
you
do
it
on
chain
and
I
think
the
simplest
way
to
think
about
it
when
you're
learning
it
just
imagine
this
being
a
Bitcoin
address,
which
you
can
do
this
entirely
on
chain
on
Bitcoin
and
actually
let
me
just
plug
a
project
of
mine
that
I
worked
on
while
I
was
at
chain
called
IV.
An
IV
is
a
smart
contract
language
for
Bitcoin
script
that
compiles
to
Bitcoin
script.
B
B
So,
if
you
imagine,
is
a
Bitcoin
script
address
someone
typically,
the
sender
put
who
puts
the
this
information
into
the
sorry
puts
a
Bitcoin
into
an
hdl-c
on
chain,
and
then
the
recipient
can
unlock
that
when
they
by
revealing
this
preimage,
that
they
know
and
if
they
don't
unlock
it
within
a
certain
set
period
of
time.
So,
typically
it's
like
24
hours
or
so
after
after
they
create
this.
They
don't
unlock
it.
B
What
happens?
Is
you
know
if
Alice
Alice
has
you
know
like
like
1,
BTC
and
Charlie
has
100
LTC
I'm,
not
sure
the
current
price
and,
as
we
all
know,
Charlie
Lee
the
found
of
light
coin
famously
dumped
his
all
his
light
coin,
at
the
height
of
the
bubble?
So,
let's
imagine
here
Charlie's
trying
to
get
entirely
out
of
light
coin
and
get
into
Bitcoin
Alice
the
way
the
protocol
works
is
first.
B
Alice
creates
an
HDL,
see
that
locks
up
this
Bitcoin,
and
this
is,
she
uses
a
hash
preimage
that
she
knows
in
and
Charlie
doesn't
yet
know
so.
Charlie
isn't
able
to
to
open
this
unless
he
gets
the
preimage
Alice
is
able
to
get
it
after
like
48
hours,
then
Charlie
sees
that
this
has
happened,
goes
and
creates
a
matching
hdl-c
with
a
shorter
time
out
on
the
light
coin
chain.
B
Is
this
just
involved
sending
this
light
coin
to
an
address,
and
this
is
a
shorter
time
out,
but
uses
the
same
hash
that
he
saw
on
this?
That
was
that
was
used
in
this
H
Chelsey.
So
in
this
one,
charlie,
is
the
sender
and
Alice.
Is
the
recipient
Alice
used
this
now
she
can
unlock
this
within
that
24
hours
and
she
gets
the
light
coin.
B
B
So
that
is
a
protocol,
that's
very
old
protocol
for
atomic
cross
chain
swaps
and
it
works
on
chain.
The
innovation
of
the
Lightning
Network
was
to
embed
these
within
payment
channels.
So
this
isn't
just
a
cross
chain
atomic
swap
protocol.
It
really
allows
you
to
do
it
across
any
two
Ledger's
and
a
payment
channel
can
be
considered
just
an
off
chain:
bilateral
ledger
between
two
parties.
So,
if
the,
if
you
familiar
the
payment
channel,
the
idea
is
that
two
parties
lock
up
some
some
assets
on
the
main
chain
into
a
contract.
B
They
transact
off
of
it
by
signing
messages
back
and
forth
to
each
other
off
chain
and
update
the
state
of
that
ledger
and
then
are
able
to
exit
it
to
the
to
the
main
chain.
I
mean
this
is
going
to
talk
about
payment
channels,
whether
they
play
a
very
important
role
in
both
lightning
and
in
a
ledger
and
they're.
Very
it's
very
important
protocol
generally,
but
you
can
just
think
of
it
being
an
off
chain
ledger
that
can
be
settled
after
a
delay
period
to
the
main
chain
and
it's
only
between
two
parties.
B
B
What
happens
is
Alice
I'm.
Sorry
in
this
case
would
be
Charlie
generates
a
pre-image
hashes
that
gives
that
hash
to
Alice
Alice
creates
a
three
Bitcoin
payment,
she'll
see
in
her
payment
channel
with
Kraken.
So
Alice
has
some
money
in
her
payment
channel
with
Kraken.
She
has
some
balance
practice
in
balance.
She
has
to
have
at
least
three
BTC.
She
reduces
that
balance
and
gives
that
money
that
would
be
it
was
previously.
B
Hers
puts
it
into
a
contract,
and
this
means
that
if
you
settle
the
payment
channel
to
the
main
chain,
you'll
get
an
H
TLC
like
this.
So
you
need
to
add
a
little
time
delay
just
to
allow
the
payment
channel
to
be
settled.
But
if
everything
goes
sideways,
Alice
would
be
able
to
settle
this
to
the
main
chain
and
hopefully
settle
the
HT
LC
within
time
within
the
mount
of
time.
B
So
only
in
the
worst
case
that
would
you
actually
have
to
settle
to
the
safe
you'll
see
to
the
main
chain,
so
alia,
Alice
Alice
locks
us
up
with
Kraken
and
then
Kraken
creates
the
same
hdl-c
a
they
see.
They
see
that
they've
had
this
they've
received.
This
a
PLC
in
this
payment
channel
they
can
create
one
with
coinbase
with
the
same
hash,
and
so
this
one,
let's
say,
has
you
know
the
72
hours.
B
This
one
has
48
hours
this
one,
so
they
put
it
in
a
hdl-c
here
with
a
48
hour
timeout,
and
this
one
with
a
24
hour
time
out,
and
so
these
timeouts,
because
remember
here
they
have
to
be
staggered
and
then
sort
of,
because
if
something
goes
goes
wrong
over
here,
then
coinbase
needs
enough
time
to
actually
claim
I'm.
Sorry,
then,
the
Kraken,
if
coinbase
claims
this
is
you'll,
see
at
the
last
second
Kraken
needs
enough
time
to
use
that
free
image
to
go.
Settle
this
one
on
the
main
chain.
B
So
these
numbers
don't
take
into
account
the
payment
channel
difference,
but
it
isn't
again
it
isn't
really
that
important
for
the
were
sitting
here,
I
and
yeah,
so
the
really
yeah.
This
really
should
really
should
be
like
4870,
right,
math
Olympiad,
what's
72,
plus
24
and
96
all
right,
so
they
create
these.
These
HDL
C's
Charlie
remember,
has
the
preimage.
He
reveals
that
preimage
and
each
of
these
payments
can
complete.
So
the
analogy
I
use
is
that
you
know
how
lightning
strikes
it
doesn't
straight.
B
Lightning
doesn't
strike
from
the
lightning
trick
that
you
see
doesn't
come
from
the
sky
to
the
ground.
That's
like
there's
a
very
sort
of
faint
lightning
strike
and
you
can
see
and
the
talk
I
gave
at
Stanford
I
have
a
video
video
of
this
previous
Google,
lightning
slow-motion.
You
can
see
this
the
path
that,
as
it
sort
of
goes
down,
it's
there's
sort
of
a
very
light
trail.
It
finds
a
path
down
and
lightning
strikes
up.
So
here
you
see
these
sort
of
like
these
ions
being
you
know
charged
here.
B
You
see
these
H
he's
being
locked.
The
actual
payment
happens
after
charlie
reveals
their
pre
image,
so
Charlie
gets
paid
first
before
alice
has
really
sent
any
money,
she's
locked
up
some
money,
but
she
doesn't
send
anything
until
Charlie
receive
his
money
there
for
telling
by
telling
coinbase
in
their
payment
channel
saying
here's,
but
here's
the
preimage.
Please
settle
this
you'll
see
in
the
payment
channel
of
coinbase
doesn't
comply.
They
just
settle
to
the
main
chain
coinbase.
B
So
then
yeah,
it's
a
coinbase,
reveal
reveals
it
to
Kraken
Kraken
feels
to
Alice
and
each
along
each
of
these
steps
they
complete
it.
If,
at
any
point
something
goes
wrong,
they
can
settle
it
to
the
main
chain.
So
again,
what
I've
just
explained
here
is
how
lightening
how
the
Lightning
Network
works,
because
in
lightning
network
you're
embedding
these
agencies
within
the
payment
channels
right.
B
So
one
one
problem
with
this
protocol
is
that
these
relationships
have
to
really
have
to
be
either
on
chain
just
like
I'm,
on
a
blockchain
with
you
when
I
can
send
you
an
HDL,
see
on
chain
which
tends
to
be
tends
to
be
a
little
slow
and
expensive
or
inside
a
payment
channel
that
supports
a
Chelsey's.
You
could
conceivably
imagine
that
venmo
could
add,
support
for
htl
sea
based
payments
or
something
like
that.
It's
it's
a
little
fanciful.
B
You
know,
banks
benches
have
talked
about.
You
know
part
of
their
blockchain
research
like
who
should
recently
supporting
an
HPLC
based
payments.
I
think
it's
kind
of
a
non-starter,
and
one
of
the
reasons
is
that
I
think
there's
a
much
better
way
to
do
atomicity
than
this
so
yeah.
So
that's
one
downside
that
you've
identified
there
is
that
it
has
to
be
on
something
substrate,
this
payment.
This
payment
relationship
has
to
be
on
some
substrate
that
supports
HDL
series
for
this
to
work.
B
Another
downside
is
this
reefing
problem
the
risk
that
what
happens
remember
in
the
happy
case,
all
this
money
is
locked
up.
So
this
is
a
total
of
of
almost
nine
Bitcoin
locked
up
what
happens
if
they're
all
waiting
for
Charlie
to
reveal
as
preimage-
and
this
is
information-
that's
uniquely
in
Charlie's
possession.
B
So
this
month
the
money
all
along
these.
These
hops
is
locked
up
for
at
least
48
hours.
If
just
if
Charlie
doesn't
it
doesn't
reveal
a
pre-image?
And
here
in
like
you,
can
you
can
cancel
it
after
48
hours,
but
it's
still
there's
three
Bitcoin
in
this,
like
major
payment
Thruway
here
between
corn,
B's
and
crack
and
imagine
they've
got
a
big
payment
channel
with
each
other
and
lightning
Network
liquidity
is
a
little
expensive.
Any
old
user
receiving
a
payment
can
just
grief
anyone
any
intermediary
the
entire
chain
of
hops.
B
By
just
withholding
this
preimage-
and
this
you
know
right
now
we
have
this
like
lightning.
They
talked
about
supporting
20
hot
payments,
but
realistically
I
mean
it's:
it's
debatable
whether
that
will
be
the
best
architecture,
but
one
reason
is
that
the
longer
this
payment
is
the
more
people,
Charlie
can
grief.
So
if
this
goes
to
a
lot
of
other
nodes
in
between.
B
B
24
hours
longer
right,
yes
by
it,
and
this
was
on
the
Lightning
Network
people
pointed
out
to
me.
If
you,
if,
once
Charlie,
doesn't
reveal
this
preimage
after
48
hours,
coinbase
can
safely
cancel
the
hdl-c
with
cracking
because
they
know
Charlie
won't
claim
it
so
that
as
long
if
Charlie's
in
everyone,
then
the
problem
is
only
it's
only
48
hours.
If
coinbase
or
whoever's
in
this
position
decides
to
creep
everybody,
then
everyone
before
them
is
locked
up
for
72
hours.
B
B
Absolutely
yes,
Alice
and
whoever
yes,
this
this,
this
person
can
give
this
person
in
Alice
and
lock
up
this
money
in
this
channel,
which
again
you
know,
that's
it's
a
pretty
bad
attack.
You
can
be
done
by
anybody
along
the
chain
and
the
thing
is
that
you
know
you're
just
routing
a
payment
here,
you
don't
actually
know
charlie.
You
thought
you
were
just
routed
being
friendly
and
routing
routing
network
payment
for
a
small
fee.
When
Charlie
does
this
to
you,
you
don't
even
receive
a
fee.
B
If
Charlie
decides
just
cancel
the
payment,
charlie
doesn't
complete
it
and
this
party,
the
user,
gets
cancelled
and
you
actually
get
nothing
for
that.
Having
that
that
lock
up,
so
that's
a
problem.
The
final
problem-
this
is
one
that's
gone,
a
little
more
mainstream.
Is
people
used
to
talk
about
a
multi
asset,
lightning
network,
and
this
would
be
more
similar
to
what
inter
ledger
actually
potentially
provides,
and
that's
where
you
have
one
of
the
hops
being
a
hop
and
some
other
currency
or
have
multiple
hops
here.
B
So
the
use
case
here-
and
this
is
one
thing-
that's
part
of
the
broaden
or
ledger
vision-
is,
if
I
make
a
payment
to
you,
I
shouldn't
care.
What
where
you,
your
money
is
where
your
who,
your
account
is
with
who
your
payment
channels
are
with
their
networks,
are
just
find
a
path
to
you
and
I
shouldn't
even
care
what
currency
you
want
to
receive
it.
Should
the
parity
I
want
to
send
in
the
currency
you
want
to
receive,
don't
don't
necessarily
have
to
be
the
same.
B
One
all
I
care
about
is
getting
you
the
money
that
you
want
in
the
currency
that
you
want,
and
we
can
imagine
just
finding
a
path
here.
Part
of
that
would
be
finding
a
path
that
includes
an
exchange
rate,
so
here
coinbase
is
acting
as
a
as
an
exchange,
essentially
where
they're
receiving
bitcoin
along
this
hop,
but
they
are
paying
out
like
coin
here,
so
it's
potentially
very
powerful,
because
this
gives
you
a
kind
of
off
chain
exchange.
B
So
if
the
price
moves
against
him,
then
he
might
decide
to
cancel
that
trade
and
just
and
just
not
let
it
complete,
and
so
you
know,
coinbase
thought
they
were
just
routing
this
payment,
but
actually
they
end
up
with
this
liquidity.
A
with
this
acquittal,
he
locked
up
for
a
very
long
time
and
also
you
know,
do
executing
this
trade
at
what
turns
out
to
be
a
bad
exchange
rate
for
them.
So
it
gives
charlie
this
free
option.
Mm-Hmm.
A
B
The
reason
that
it
doesn't
I
was
saying
second,
so
the
inner
ledger
does
use
HT
LCS,
but
it
uses
them
at
a
slightly
higher
layer
that
isn't
enforced
by
the
payment
channel
or
whatever.
This
payment
mechanism
is
so
all
of
this
inner
ledger.
All
of
this
needs
to
support
is
just
a
the
ability
for
coinbase
to
pay
charlie.
So
here's
here's
how
I
render
ledger
supports
this
I.
B
Let's
talk
first,
just
about
imagine,
we
just
have
a
because
this
is
a
gem
that
sort
of
just
a
general,
more
general
insight.
Suppose
we
have
just
alice
and
Charlie.
Remember:
let's
go
back
to
trading
and
we
want
to
trade
one
BTC
for
100
LTC
right,
so
Charlie
wants
to
send
this
to
Alice
and
Alice
won't
send
it
to
Charlie.
The
problem
with
just
Alice
sends
it
first
to
Charlie,
and
then
he
sends
it
next
to
Alice
is
what's
the
pond
with
that
alright
well,
Charlie
will
keep
the
BGC
right.
B
Charlie
Charlie
could
could
cheat
Alice
by
just
aborting
the
protocol
at
that
point
and
keeping
everything
there's
a
problem,
because
right
now,
bitcoin
is
kind
of
expensive.
But
what?
If
this
payment
was
much
smaller,
what
if
it
was
just
point
o
1
BTC-
and
this
was
just
well
one
bit
went
out-
Lisa-
is
still
a
little
expensive.
Let's
add
some
more
zeros.
You
know
0.01
LT
see
if
this
happened.
The
truck,
if
Alice
sends
this
to
Charlie
and
Charlie
doesn't
send
the
payment
back.
Alice
is
only
out
plain.
B
L1
BBC
may
be
still
expensive,
but
you
can
make
this
as
small
as
you
want.
You
can
make
this
one
Satoshi
so
for
a
sufficiently
small
trade.
Alice
doesn't
really
have
to
worry
about
Adam
issah
T,
because
if
Charlie
cheats
her,
she
can
just
close
her
channel
with
Charlie
or
end
her
relationship
with
Charlie
and
she's
only
lost
a
relatively
small
amount.
So
that's
the
basic
insight
and
what
you
do
here,
because
we
have
this
protocol
for
doing
this.
You
just
do
this
over
and
over
again.
B
A
B
Not
exactly
so
here
because
you're
doing
the
way
that
the
trade
actually
works,
isn't
that
the
payment
goes
both
ways
along
these
channels.
It's
that
it
goes
only
one
way,
but
at
some
point
in
the
middle
it
gets
turned
into
like
coin.
So
with
you
complete
the
path
here
by
having
coin
base
turn
this
payment
into
LTC
so
like
so.
This
is
so
there's
a
payment
you
can
think
of
it
as
a
payment
from
Charlie
Charlie.
You
know
this
address.
A
The
natural
concern
here
is
that
each
of
those
links
has
a
latency
right.
Yes,
so,
let's
say
the
superfast
like
point
zero
five
seconds:
that's
pretty
slow
problem.
That
sounds
like
about
right
right
if
I'm
sending
one
Satoshi
waiting
until
they
receive
my
light
coin,
I
guess
if
it's
Charlie's
the
other
way
around,
then
then,
in
order
to
send
like
1
BTC,
that's
going
to
take
me
years.
That's.
B
Absolutely
true,
and
so
that's
the
that's,
maybe
the
biggest
downside
of
this
is
that
a
large
payment,
if
you're
very
small,
now
to
trust
along
this,
takes
time
proportional
to
the
size
of
the
payment.
I
think
I
think
that
isn't
it
isn't
necessarily
that
that
you're
concerned
and
well
I'll
talk
about
that
in
a
second,
but
just
to
just
to
sort
of
explain
how
the
how
the
mechanism
of
this
works.
We
still
do
in
hdl-c,
because
we
still
want
people
along
the
way
to
know
it's.
Not.
B
B
So
if
you're
making
payments
that
small,
you
are
trusting
your
immediate
counterparty
that
they
won't
sort
of
bought
the
protocol
and
have
you
lose
that
money?
So
that's!
That's
you
know.
The
sort
of
the
dirty
secret
of
that
lightning
doesn't
actually
use
these
agencies
in
this
way,
but
they
still
you
still
do
it
on
the
higher
layer.
So
you
create
a
nice
shell
scene.
This
is,
for
you,
know,
yeah.
Let's
say
this
one
Satoshi
for
now
and
because
it's
not
enforced
by
the
base
chain,
we
can
have
this
be
a
very
short
time
out.
B
You
know
they
haven't,
received
a
message
from
them,
but
they
they
claim
that
they
did
and
that's
a
problem
between
them.
It's
not
enforced
by
the
ledger
and
it
doesn't
matter
to
anybody
else.
So
if,
if
you
know,
if
you
lock
up
all
these
Toshi's
and
then
Charlie
completes
this
payment,
charlie
receives
a
Satoshi,
and
it's
just
you
know
up
to
what
happens
as
coinbase
reveals
the
preimage
to
Kraken
and
then
Kraken
potentially
cheats
coinbase
here
by
not
actually
making
this
payment
without
getting
their
payment
channel
to
pay
this
one
Satoshi.
B
But
in
that
case,
coinbase
knows
that
enable
to
close
the
payment
channel
with
crack
and
it
would
it
be
sort
of
a
silly
thing
for
them
to
do
so.
That's
that's
sort
of
how
that
how
the
protocol
is
built
on
top
of
on
top
of
just
these
vanilla
payments,
usually
she'll
sees
at
a
higher
layer.
So
you
asked
a
great
question,
which
is
about
the
the
latency,
so
reasonably
I
think
we
could
say
like
at
minimum.
B
Around
50
cents
is
a
reasonable
trust
limit,
because
that's
what
it
costs
to
settle
in
hdl-c
on
the
main
chain.
In
fact,
we
should
probably
be
hired
because
at
that
price,
all
the
money
that
you
put
in
that
htl
see
if
you
try
to
settle
it
with
an
ELC
just
like
gets
paid
into
fees.
So
it's
so
we
just
sort
of
its
lost.
So
really
you
honestly
have
to
go
like
significantly
higher
for
something
be
worth
actually
settling
within
hdl-c
on
the
main
chain.
B
So
if
you're
doing
lightning
and
then
the
other
thing
that
you're
you're
trusting
the
funder
of
a
channel
trusts
their
counterparty
in
some
sense,
because
the
funder
is
paying
some
fees
for
this
to
open
this
channel,
and
so
if
the
counterparty
just
closes
it
or
forces
them
to
close
it,
the
funder
ends
up
losing
the
amount
of
these
fees,
and
that
can
be.
You
know
if
it's
tens
more
or
more
a
couple
dollars.
So
there
is
this
counterpart.
You
trust
remember.
This
is
only
a
very
local
form
of
trust.
B
It
doesn't
global
trust
where
I
have
to
trust
everybody
who's
downstream
of
me
in
a
payment,
the
so
I
reasonably
think
this
doesn't
have
to
be
one
Satoshi.
It
could
be.
It
has
immune
sort
of
at
least
fifty
cents,
maybe
let's
say
it
can
be
a
dollar,
and
that
this
is
the
amount
that
you
have
in
flight
at
any
particular
time.
B
So
there
could
be
a
lot
of
payments
going
from
the
point
base
to
Charlie
and
you
don't
actually
have
to
update
the
payment
channel
until
the
their
net
amount
is
is
more
than
$1
from
where
their
last
state
of
the
payment
channel
was,
and
then
you
have
to
actually
update
the
payment
channel.
So
the
way
that
integer
is
working
to
search
either
sort
of
optimize.
B
This
is
that
you
have
all
these
packets
and
payments
going
back
and
forth,
and
your
sort
of
constant
every
every
you
know
0.1
seconds
or
something
updating
your
payment
channel
to
reflect
the
latest
balance
so
that
you
don't
said
you
know
you
don't
actually
end
up
going
over
the
your
total
in-flight
limit.
The
amount
that
charlie
is
willing
to
trust
coinbase
here
or
a
corn
base
is
gonna
trust,
charlie,
but.
A
If
so,
you're
saying
I
don't
need
to
trust
everyone
on
the
way
right,
but
if
I'm
yeah
sending
money
through
a
Multi
multi
hope
like
like
sequence
of
connectors
and
and
someone
very
late
in
the
sequence,
doesn't
send
money.
Yeah
then
effectively
I
just
lost
my
my
one
dollar
but
I'm,
not
closing
my
channel.
No.
B
B
Who
loses
money
in
this
case?
No
one
loses
money,
actually,
if
it
does,
if
it
doesn't
complete,
because
I've
locked
up
this
Satoshi
for
15
seconds
and
I
say
we
say:
ok,
this
one
Satoshi's,
you
know
reserved
for
this
particular
payment
and
if
I
get
this
premature,
this
hash
I
will
pay
the
Satoshi
from
Charlie
to
Kraken.
Kraken,
says
to
Charlie.
A
B
Knossos
right,
so,
let's
think
about
what
happens.
The
actual
protocol
for
doing
this
this
completion
here
is
that
first
coinbase
reveals
the
preimage
that
they
learned
from
charlie
to
kraken,
and
then
they
update
the
payment
channel
so
that
this
payment
goes
through
and
cornices
balance
is
$1
higher.
So
what
could
happen
here
is
coinbase,
reveals
that
preimage
and
then
crack
and
uses
it
to
complete
this
payment
from
an
Alice
or
from
you
know,
from
Charlie.
So
Kraken
gets
this
money,
but
Kraken
doesn't
update
this
payment
channel
with
coinbase.
B
The
only
person
who's
been
cheated
here
is
coinbase
and
going
by
steal,
face
charlie
coin.
Miss
has
already
paid
charlie
when
that
Mineta
having
happens.
So
that's
the
key
idea
here
is
that
the
last
game,
the
recipient,
receives
the
money
before
the
sender
has
even
sent
it
and
allowing
each
step
your
only
you
can
only
be
cheated
by
your
immediate
county
party,
and
so
Charlie
can
cheat
coinbase
corn-based
can
cheat
crackin
and
cracking
can
cheat
god.
B
The
way
around
right,
I
think
it's
the
other
way
around
yep
surrounds
right,
Charlie
reveals
the
preimage
and
then
claim
its
yep,
so
corn.
We
can
shoot
Charlie,
kraggen
can
cheat
coinbase
and
Charlie
can
cheat
crackin
by
the
way
you
could
flip
that
so
there's
no
there's
no
particular
reason
why
it
this
protocol
for
updating
this
couldn't
be
coinbase
makes
the
payment
and
then
Charlie
provides
the
preimage
so
yeah,
so
you
can
sort
of
have
that.
Have
that
cheat
go
either
way
and.
A
So
the
question
is:
do
we
know
the
the
structure
of
the
network,
or
so
when
I'm
again,
it's
easier
for
me
to
think
that
this
is
Alice?
It's
a
separate
entity
right
but
let's
say
Alice
wants
to
pick
charlie
and
she
happens
to
be
connected
to
Kraken.
That's
you
need
to
know
how
kraken
is
gonna,
send
it
to
charlie
or,
let's
just
say,
kraken.
If
you
have
any
path
to
Charlie,
please
complete.
B
This
payment
in
the
lightly
Network
they
use
source
routing,
which
means
that
Alice
tells
Kraken
exactly
the
path
to
go
and
I
believe
they
have
Onion
Routing,
in
fact,
which
means
that
Alice
can
tell
Kraken
just
the
next
path
to
take
and
give
it
blah
blah
unencrypted
blob
of
data.
The
coinbase
will
then
be
able
to
unencrypted
to
find
out
the
next
path
to
go
in
inter
ledger.
B
They
use
something
more
similar
to
what
the
how
the
Internet
Protocol
does
routing,
where
Alice
just
tells
Kraken
the
final
inter
ledger:
I
address
the
ILP
address
and
the
LP
address.
Oh
my
god,
I,
don't
wanna
get
too
much
into
the
details
about
that,
but
it's
sort
of
like
an
IP
address
in
that
it
includes
in
it
some
information
about
how
to
route
the
power
that
sort
of
default
way
to
route
this
payment,
because
it's
sort
of
network
you
imagine
destruction
in
this
hierarchical
way.
So
just
by
telling
Kraken
this
address.
B
Kraken
then
knows
the
best
path
to
sort
of
continue
that
that
packets
path
to
that
Charlie
so
yeah.
So
we
call
in
energy.
We
call
these
packets
because
again,
that
is
very
small,
economically
relatively
insignificant
amounts
of
payments
that
are
just
made
in
you
know
quick
succession
I'm
in
order
to
complete
this
large
payment.
So
you
asked
about
the
size
of
payments.
Again
we
can
do
one
dollar.
If
optimistically,
you
say
we
could
do
you
imagine
we
could
do
10
updates.
B
So,
first
of
all,
it's
not
a
limit
on
I
want
to
say
it's
not
a
limit
on
you
don't
have
to
Allison
have
to
wait
for
Charlie
to
receive
this
payment.
It
really
is
just
Alice
and
crack
and
have
to
update
their
payment
channel
balance
this
frequently
and
if
the
amount
that
they
have
in
flight
ever
goes
above
or
above
that
amount,
then
they
have
to.
They
have
to
cancel
but
yeah
I
guess
I
mean
yeah,
I,
guess
yeah.
So
the
the
question
here
is,
you
know
if
you
can
do
like?
B
That's
right,
but
although
if
Alice
has
multiple
paths,
she
can
send
packets
along
all
those
paths
they
can
all
go
through.
Maybe
this
massive
two
part
between
crack
and
coinbase
serve
Alice's
multiple
parties
with
uncorrelated
failure
probabilities.
Then
she
could
conceivably
just
send
packets
across
all
those,
and
he
had
like
you
know
they
could
maybe
even
I'll
find
their
way
along
this
one
sort
of
like
a
superhighway
here,
but
yeah
I
think.
A
B
Right,
so
it's
all
local
trust.
It's
all
trust
with
your
immediate
counterparties.
You
know,
Charlie's
I
have
to
trust
anything
about
the
system,
and
this
is
what
makes
it
I
think
superior
to
the
lightening
the
ledger
and
forest
hdl-c
model
where
you
can
be
grieved
for
a
very
long
time
here.
Alice
can
only
be
grieved
for
like
15
seconds
of
one
satoshi,
which
is
nothing
or
one
dollar,
which
is
very
little
I
in
the
in
the
griefing
model.
B
Yes,
it
doesn't
necessarily
mean
that
Charlie
can
steal
any
money,
but
the
griefing
of
losing,
like
the
whole
three
Bitcoin
for
a
for
72
hours.
Potentially
it's
just
like
catastrophic
compared
to
the
cost
of
losing
the
dollar,
and
it's
it's
not
localized,
so
coin
bees
didn't
do
anything
wrong
and
Kraken
is
still
grieved
for
this
amount.
So
that's
the
that's,
that's
sort
of
the
problem
with
that
and
I.
B
Why
I
think
it's
much
harder
to
solve
the
reputations
and
then
something
where
here,
when
you
open
your
channel
with
something
really
has
to
be
local
reputation
so
yeah
so
I
said
you
know,
I
think
kwame's
and
cracking
the
very
well-known
party's.
Only
one
of
the
parties
in
the
payment
channel
needs
to
be
semi
trusted
by
the
other
I
said.
One
of
them
can
be
anonymous.
Sorry
I
thought.
B
Be
but
it
could
be,
you
could
switch
it
so,
like
you
could
say
again
that
Alice
makes
the
payment
first
and
then
crack
and
shows
to
the
preimage.
You've
just
changed
the
protocol
in
that
way,
or
just
along
each
of
these
steps,
you
could
have
the
burden
of
cheating
fall
on
which
other
party
you
want.
B
So
if
you
imagine
like
not,
for
example,
very
well-known
party,
but
a
pseudonymous
party,
even
the
one
that
has
reputation
or
like
a
like
a
gray
area,
you
know
something
like
people
were
willing
to
trust
Silk
Road
with
a
lot
of
their
money,
certainly
for
a
short
period
of
time.
I
think
like
shape-shift,
is
a
good
example
here
of
a
party
where
people
are
willing
to
take
the
counter
part.
We're
willing
to
take
the
counter
party
risk
that
shape-shift
would
seal.
B
It
would
steal
some
of
their
money
when
they
sent
it,
because
it
was
only
for
a
few
seconds.
So
there's
no
custody,
that's
going
on
for
a
long
time
there
and
shape-shift
has
been
around
and
has
a
lot
of
reputation
that
they
would
lose
if
they
if
they
fail
to
complete
these
payments.
So
each
of
these
parties,
kind
of
thought
of
is
like
shape-shift
when
they
were
a
team
is
payments
because
they're
receiving
one
you
know
kind
of
payment
in
the
pain,
another
I'm
taking
fees
and
so
yeah.
A
B
Ain't,
it
that's
not
necessary.
True,
you
could.
You
could
find
somebody
who
you
trust
and
open
a
channel
with
them
and
just
give
them
the
burden.
So
one
way
to
do
would
be
you
could
do
it
even
where
you're
receiving
this,
but
you
just
make
an
upfront
deposit
and
say,
like
you
know,
if
week,
when
we
close
the
channel
I
will
lose
this
amount.
Alice
will
lose
amount
of
crack
and
and
then
you
can
do
these
payments
and
crack
and
we'll
know
that
they
are
the
most.
B
B
So
when
this,
when
this
initially
happens,
maybe
Alice
makes
a
deposit
that
is
that
covers
whatever
she
would
she'd
be
able
to
steal
and
over
time
we
can
grow
this
limit,
because
alice
has
been
paying
fees
to
Kraken
over
the
lifetime
of
this
channel,
and
so,
if
kraken
is
collecting
just
like
you
know,
5%
fees
and
kraken
wants
to
limit
their
loss
to
alice,
to
being
just
like
50%
of
the
total
lifetime
value.
That
kraken
has
has
received
from
alice
over
the
course
of
the
channel
that
ori,
no
matter
what.
B
In
so
doing,
she
could
be
just
exponentially
raising
the
value
of
her.
This
the
trust
limit
on
her
channel
I,
say
exponentially.
It
is
it's
sort
of
a
small
exponent,
but
it's
a
small
or
small
base,
but
over
time
you
know
again
that
that
still
can
grow
to
potentially
be
a
very
large
amount
of
money
over
the
lifetime
of
this
channel
and.
A
B
So
right
so
you
wouldn't
it
wouldn't
yeah
it's
true.
It
wouldn't
be
a
5%
fee,
I'm,
not
sure
with
the
fees
right
now
in
the
Lightning
Network,
our
I
feel
like
maybe
it's
1%
or
less
I.
Guess,
yes,
probably
I,
think
it's
less
than
1%.
So
it's
true,
I,
think
and
I
think
the
fee
model,
and
this
generally
hasn't
really
been
figured
out
for
either
in
our
ledger
or
or
4
or
4.
Litening
III,
wonder.
B
Actually,
if
and
a
lot
of
these
cases,
it'll
turn
out
to
be
a
kind
of
loss
leader
where
you'll
provide
routing
for
very
cheap
may
be
free
and
just
monetize
the
user
in
other
ways
and
you're
gonna
I
think
there's
bad
ways
to
do
that,
where
you're,
where
you're
monetizing
their
their
data
and
there's
other
ways
to
do
it
where
it's
just
you
know
like
this.
Is
this
a
service
that
coinbase
are
crack
and
provide
to
their
customers
and
they
make
money
on
like
exchange
fees
or
something
else,
and
when.
B
When
Alice,
so
within
an
inner
Ledger
I'm
a
little
more
familiar
with
her
an
alleged
does
this
a
packet
is
very
simple:
it
just
has
I
believe
the
destination
address
which
includes
in
it
the
this
sort
of
hierarchical
ILP
address,
which
also
covers
I
believe
what
currency
Charlie
wants
to
receive
it,
and
so,
if
Charlie
has
multiple
different
currencies
that
can
receive
things
and
in
different
channels.
That's
covered
by
this
address
and
I
believe
the
amount,
and
what
this
amount
is
is
actually
the
amount
that's
being
sent,
and
so
what
happens
is
as
this
amount.
B
So
if
this
is,
this
will
just
be
like
so
Alice
will
send
this
and
it'll
be.
You
know
one
dollar
crack
and
take
their
fee
out
and
now
that
packet,
this
pack
of
a
Centon
says
like
ninety
nine
cents,
and
then
here
the
pack
at
the
base
end
on
sounds
like
ninety
eight
cents
and
yes,
okay,
maybe
I'm
worried
about
misrepresenting
this,
but
the
basic
it
isn't
Charlie
receives
this,
and
if
this
is
less
money
than
they
expect
it
to
receive
in
this
payment,
they
can
just
cancel
it
if
they,
if
they
need
to.
B
But
the
idea
is
that
you
know
they
they
take
into
account.
Okay,
some
fees
got
lost
along
the
way
got
taken
about
taking
out
along
the
way,
and
they
say:
okay,
is
this
a
reasonable
amount
to
receive
based
on
what
someone
Alice
sent,
so
they
can
and
that
all
is
handle
the
higher
levels
of
the
protocol
sweitzer
to
the
basis
packet
format,
I
believe
it's
just
a
LP
address
and
the
destination
IP
address,
not
the
source
address
and
the
amount
that
is
in
this
particular
hop.
A
B
The
because
the
HLC
is
the
HDL,
a
the
hash
time.
Mark
agreement
is
happening
at
a
higher
layer
than
the
payment
layer
on
the
payments
level.
It's
it
really
is
just
simple
payments
back
and
forth
between
coinbase
and
charlie,
and
so
you
could
do
this
with
anything.
You
could
do
it
with
with
dollars.
If
you
may
like
to
do
with
wire
transfers,
although
they
may
not
be
highlighted
a
low
latency
enough,
you
could
do
it
with
tossing
pennies
across
the
Grand
Canyon
and
anything
that
supports
making
small,
relatively
small
payments.
B
Mount
variants
relatively
quickly
can
support
this.
So
one
thing
notice
that
this
protocol
is
not
particularly
good,
at
least
in
my
opinion,
if
the
channel,
if
his
payment
relationship
is
something
that's
just
settled
on
chain,
so
this
is
was
something
that
it
was
sort
of
originally
part
of
the
vision.
Manner,
ledger
I
think
it's
it's
still.
It's
still
something
that
they
they
talk
about
in
support,
I
think
they.
They
have
maybe
slightly
different
views
on
it
than
me,
but
the
idea
is
Alice.
You
know
we
could.
B
We
could
have
these
relationships
be
that
they
make
these
payments.
You
know
this
payment
relation
is
just
we're
on
the
same
block
chain
right,
so
I
guess,
coinbase
and
Charlie
are
on
the
same
block
chain
and
coinbase
is
making
just
Bitcoin
payments
on
the
ledger
to
Charlie
and
Kraken
is
making.
You
know
like
like,
like
coin
payments
on
the
ledger,
maybe
the
coin
base-
and
this
is
so.
This
is
not
as
good
a
protocol
for
that,
because
the
cost
of
doing
and
latency
of
doing
an
on
chain
payment
is
much
higher.
So.
B
Chain
right,
so
if
each
link
is
settling
on
chain
rather
than
just
by
sending
signed
messages
to
each
other
in
a
payment
channel
which
is
practically
free
if
they're
settling
on
chain,
it's
sort
of
hard
to
do
these
many
tiny
payments,
and
that's
where
maybe
like
the
idea
of
using
it,
it
she'll
see
on
chain
gets
more
attractive.
My
opinion,
though,
is
if
you,
if
you've
got
us
if
you're
using
like
instead
of
using
HDL,
sees
on
chain,
you
can
just
open
a
payment
channel
on
chain
and
do
the
micro
payments
protocol
over
that.
A
Feasibly
again,
let's
say
that
that
at
some
point
we're
converting
it
to
fiat
and
then
from
here
let's
say
it's
a
venmo
payments
right.
So
these
two
entities
they
are
unlikely
to
be
sending
like
one
dollar
to
each
other
over
any
sort
of,
because
that
also
costs
money
right,
so
so
physical.
So
the
expectation
is
that
they
will
have
like
a
significantly
higher
limit
and
they
will
just
accumulate
yeah
and
then
settle
it
within
like
10
days
right.
B
B
Exactly
so
because
Charlie,
because
Charlie's
willing
to
say
like
I,
believe
that
coinbase
you
know,
I
can
I
can
hold
this
credit
relationship
essentially,
and
this
was
one
of
the
what
I
think
in
an
alleged
they
called
the
Enlightenment
at
one
point
was
realizing.
It
was
originally
a
protocol
for
these
cross
ledger
atomic
transactions,
where
these
entities
like
coinbase,
that
were
Ledger's
where
somebody
would
be
or
Bitcoin
into
the
Bitcoin
ledger,
was
treated
as
like.
B
This
is
a
ledger
and
with
settling
on
that,
the
the
realization
is
that
you
know
coinbase
here,
maybe
they're
running
a
ledger
of
venimos
running
a
ledger,
but
in
some
sense
they
are
just
another
connector.
It's
it's
a
credit
relationship
that
Charlie
has
like
with
venmo
so
again
like
this,
isn't
because
memos
in
the
cell
really
exactly
participate
in
the
protocol,
but
you
can
kind
of
imagine
this
being
a
venmo
being
another
hop
on
this.
B
B
So
I
mean
I
think
that's
that's
most
of
what
I
know
about
I
hope
you
talk
about
IOP
I'm
very
focused
on
like
this
is
the
this
hdl-c
issue
and
and
why
I
think
so?
If
you
wanna
learn
more
about
that,
you
can
see
my
my
talk
on
at
the
Stanford
blockchain
conference.
If
she's
considered
harmful
and
that's
online,
the
video
and
slides
from
that
are
online.
Yeah
I
mean
I.
If
that's
I,
think
that's
basically
inter
legend
again,
I
think
it's
it's
a
protocol.
B
Where
potentially
could
it
could
be
a
prima
Channel
protocol
across
every
blockchain
network?
It's
a
channel
network
that
could
go
across
every
budget
ledger
allowing
payments
from
from
anyone.
You
know
who
has
any
any
cryptocurrency
to
anyone
else
without
them
having
to
worry
about
what
their,
what
their
the
currency
that
they're
sending
being
the
same
as
the
currency
to
the
receiving
and
yeah
I
mean
I,
think
I
think
it
has.
A
B
B
One
of
the
inventors
of
the
inner
logic
protocol,
along
with
Evans,
was
the
other
inventor,
so
Stephane
Thomas
Tobin
started
this
company
coil,
which
uses
in
your
ledger
for
web
payments
for
monetizing
content,
I'm
a
sort
of
butchering
the
description
of
it
there,
but
you
can
check
out
coil
as
a
project
there.
Using
your
ledger
live
right
now,
I
think
it
is.
It
is
live
on
on
ripple
right
now.