delvingbitcoin

Payjoin-in-Potentiam: Externally fund an LSP channel open with one transaction

Payjoin-in-Potentiam: Externally fund an LSP channel open with one transaction

Original Postby bitgould

Posted on: April 2, 2024 14:52 UTC

The discussion revolves around the nuanced details of handling 0-conf offchain operations within a specific protocol, highlighting the conditions under which Bob can accept such transactions without waiting for confirmation.

The primary focus is on transactions involving swap-in-potentiam funds, emphasizing that Bob's acceptance of 0-conf channel funding is contingent upon these funds originating from a swap with the same party. This specificity is crucial because it delineates the circumstances where immediate trust can be established, contrasting with situations where external funds are involved, necessitating at least one confirmation to ensure the legitimacy of the source of funds.

The conversation further delves into the comparison and potential integration of two protocols: swap-in-potentiam (SIP) and payjoin-in-potentiam (PIP). SIP is lauded for its simplicity and its facilitation of scenarios where Alice, the sender, need not maintain constant online presence—a feature particularly beneficial for mobile wallet users. This aspect underscores the protocol’s design towards optimizing user convenience and network efficiency in typical use cases. Conversely, PIP is presented as an advanced optimization strategy aimed at fee saving through efficient batch processing, while also incorporating safety nets via SIP. The strategic advantage of PIP extends beyond mere cost savings; it offers enhancements in privacy and transaction efficiency by enabling Lightning Service Providers (LSPs) to manage fund consolidation and transaction cut-throughs more discreetly and effectively.

The narrative articulates a keen interest in building upon the foundational principles of SIP, suggesting a vision for further development and refinement of these protocols to enhance their utility and efficiency. It raises critical considerations regarding the importance of correct implementation and the potential risks of compromising on correctness for optimization. The discourse invites contemplation on the balance between innovation and reliability, advocating for a cautious approach to protocol development that prioritizes the integrity and security of transactions without dismissing the inherent benefits and possibilities offered by technological advancements.