2 upvotes, 1 direct replies (showing 1)
They are simply IOUs.
No, they aren't. They are unconfirmed transactions.
The difference between Lightning transactions and normal unconfirmed transaction is that Lightning transactions happen within a contract which makes it impossible for one of parties to cancel or double-spend them.
Accepting unconfirmed transaction is risky because network knows nothing about your arrangement with sender, and he can cancel payment through double-spending at any time.
But when you do Lightning, you first get the contract confirmed on-chain. Now the blockchain knows what you and your counterparty agreed to, and it won't allow your counterparty to cheat.
So this has nothing to do with IOU, LN transactions are simply transactions with delayed confirmation and updateability.
IOUs depend on trust, LN transactions do not. IOUs aren't guaranteed to be repaid, LN transactions are certain.
Comment by [deleted] at 23/12/2017 at 16:28 UTC*
0 upvotes, 1 direct replies
[deleted]