HashPlex is a company that specializes in hosting miner services, allowing home miners access to industry standard electricity rates in order to stay competitive. While their main focus is indeed the mining aspect of Bitcoin, the people over at HashPlex understand the importance of the Bitcoin network, which is especially seen by the debut of their new open source lightning hub. I talked to Bernard Rihn, CEO and founder, as well as Jasper Hugunin, their leading Lightning Dev, over at HashPlex regarding the Lightning Network and Hubs.
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Can you briefly describe what is and how the lightning network works?
In short, the Lightning Network is an extension of Bitcoin hub-and-spoke micropayment channels which supports better revocability and chaining of transactions through multiple hubs (allowing us to create a network of hubs). After initiating a single multi-signature on-chain “anchor” transaction with a hub, Lightning allows us to transact with many other semi-anonymous parties in a means that’s nearly instantaneous, nearly free, and trustless, without ever touching the blockchain.
Micropayment channels were most likely first implemented publicly by Mike Hearn and Matt Corallo in BitcoinJ. Hub-and-spoke micropayment channels were first described on the Bitcoin-devs mailing list by Peter Todd, but he says the idea is something Jeff Garzik described as “so obvious anyone who does a micropayment channel implementation would think of it.”
Micropayment channels were originally unidirectional (with a definite producer and consumer), but proposals were made to make them bi-directional (e.g.).
Lightning adds hashed timelock contracts (HTLCs) to bi-directional hub-and-spoke payment channels, allowing us to chain transactions through multiple untrusted hubs. Most of the recent work has built upon a foundation of Poon-Dryja channels with some of the latest