Thread

Until you close a lightning channel, the balance between you and your channel partner is private information. When you close the channel, the funds need to be split between two addresses. So at that point it is known on the public Blockchain what the split was... 50/50, 20/80, 90/10 etc.

I mean, this implies "only when there is a disagreement", implying that when someone force closes a channel which naturally will have the amount that each of you agreed you were entitled to. If you do a consentual close, then you technically get to pay less in fees, so you get back more than you would otherwise, and TECHNICALLY, you can agree to split it 10 ways just to confuse Blockchain observers, you and the partner are just making a standard multisig withdrawal. Also, you can easily identify a forced channel close, but a mutual close will hide the fact that your channel was ever a lightning channel.

I am confused why it says only when a single party disagrees. Disagrees on what? and how come only 1 party needs to disagree for the balance to be on the blockchain? Am i missing something?

Well all disagreements are two party events, but if one person makes the first move, then the other disagrees I guess. Each time money flows from one side of the channel to the other, there is a possibility of a disagreement. That said, until both parties agree and have signed transactions backing that agreement, nothing has officially happened. So let's say, you want to update the channel, 500 sats from me to you. I get your request, I disagree. My node is handling everything in an automated fashion and really it disagreed because something about your request was not following the expected rules of engagement. Instead of "negotiating", it just decides to break the connection ASAP and broadcasts the latest transaction it knows that your node also agreed with. Since the nodes never agreed on this new balance change, what is broadcast to the network IS the last agreed balance. Also, if this dispute was part of a chain for someone to else's payment, that person's payment aborts and their wallet tries again finding a different route.

My point is that it is all atomic, no one gets more or less than they deserve.

Thank you! this makes perfect sense. so if one party disagrees it broadcasts the last known agreed upon balance on the chain. this was very helpful.