Is the below scenario is how transaction are carried out in lightning network? Is this a proper understanding?

Alice & Bob where they transfer 1 BTC each other.  1. Both Alice & Bob transfer 1 BTC into a shared multisig address. 2. A ‘balance sheet’ is created where 1 BTC is paid by Alice -> Bob and 1 BTC is paid by Bob -> Alice. 3. In the above transaction, Alice signs the transaction and gives to Bob and vice-versa.  4. Either Alice or Bob can sign their counterparts payout transaction and broadcast it to the blockchain. 5. Alice will update the ‘Balance sheet’ as 0.5 BTC to Alice and 1.5 to Bob and send the payout transaction to Bob to sign. 6. To ensure neither Alice  or Bob revert to the old transaction, each will create an ‘anti-cheat’ transaction.  7. If Alice and Bob wants to close the channel, they can consensually close the channel and broadcast the transaction to the blockchain.

  • You've hit the main points from a high level. Do you actually have a question? – Jestin Jan 18 '18 at 22:56
  • No, I'm still learning lightning network. Just wanted to confirm if I'm on the right track. Thanks! – Holmes Jan 19 '18 at 5:57

Your Answer


Browse other questions tagged or ask your own question.