From benjamin.l.cordes at gmail.com Tue Jun 23 10:36:32 2015 From: benjamin.l.cordes at gmail.com (Benjamin) Date: Tue, 23 Jun 2015 12:36:32 +0200 Subject: [Lightning-dev] Routing and explicit trust Message-ID: Hello, I find the paper very interesting. There is quite a few things I don't understand. In the the paper there are the terms "channel counterparty" and "clearinghouse". What is exactly the risk to this counterparty and why would it be trustless to route through that party? How would users of the network find and select those intermediaries? I think in general building trust-based level 2 protocols is a good idea - it's not clear to me how it would work without explicit trust. Opening a channel is similar to declaring - I trust this counterparty X up to amount Y. If X disappears then the risk is capped at Y. In the existing banking and monetary system counterparty risk can be minimized by shifting unwanted exposures. The problems are often more in the systematic risk, such as a failure of a banking system as a whole. If counterparties are interconnected, failures can propagate in unexpected ways. For example A might trust B to route or clear and not trust C. But B might have exposure to C, so that A's exposure can't be diversified. Regards, Benjamin -------------- next part -------------- An HTML attachment was scrubbed... URL: