"big to-network channel" nit: should this be "big from-network channel" ?
thanks for this explanation. On Sat, Oct 3, 2020 at 11:45 PM ZmnSCPxj via bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org> wrote: > > Good Morning Mr. Lee, > > > I cannot front up funds of my own to give > > them inbound balance because it would consume all of my treasury to lock > > up funds. > > This is not a reasonable assumption! > > Suppose you have a new hire that you have agreed to pay 0.042BTC every 2 > weeks. > > On the *first* payday of the new hire, you *have* to have *at least* 0.042BTC > in your treasury, somehow. > > If not, you are unable to pay the new hire, full stop, and you are doomed to > bankruptcy and your problems will disappear soon once your cut-throat new > hire cuts your throat for not paying her or him. > > If you *do* have at least 0.042BTC in your treasury, you *can* make the > channel with the new hire and pay the salary via the new channel. > > At *every* payday, you need to have at least the salary of your entire > employee base available, otherwise you would be unable to pay at least some > of your employees and you will quickly find yourself with your throat cut. > > > > > Now, let us talk about *topology*. > > Let us reduce this to a pointless topology that is the *worst possible > topology* for Lightning usage, and show that by golly, Lightning will still > work. > > Suppose your company only has this one big channel with the network. > Let us reduce your company to only having this single new hire throat-cutter > (we will show later that without loss of generality this will still work even > if you have thousands of throat-cutters internationally). > > Now, as mentioned, on the first payday of your throat-cutter, you *have* to > have at least the 0.042 salary you promised. > If you have been receiving payments for your throat-cutting business on the > big channel, that means the 0.042 BTC is in that single big channel. > > You can then use an offchain-to-onchain swap service like Boltz or Loop and > put the money onchain. > Then you can create the new channel to your new hire and pay the promised > salary to the throat-cutter. > > Now, you have no more funds in either of your channels, the to-network big > channel, and the to-employee channel. > So you are not locking up any of *your* funds, only the funds of your > employee. > > Now, as your business operates, you will receive money in your to-network big > channel. > The rate at which you receive money for services rendered *has to* be larger > than 0.042/2weeks on average, *otherwise* you are not earning enough to pay > your throat-cutter by the time of the *next* payday (much less your other > operating expenses, such as knife-sharpening, corpse disposal, dealing with > the families of the deceased, etc.). > If you are not earning at a high enough rate to pay your employee by the next > payday, your employee will not be paid and will solve your problems by > cutting your throat. > > But what that means is that the employee salary of the *previous* payday is > not locked, either! > Because you are receiving funds on your big to-network channel continuously, > the employee can now spend the funds "locked" in the to-employee channel, > sending out to the rest of the network. > This uses up the money you have been earning and moving the funds to the > to-employee channel, but if you are running a lucrative business, that is > perfectly fine, since you should, by the next payday, have earned enough, and > then some, to pay the employee on the next payday. > > Of course there will be times when business is a little slow and you get less > than 0.042/2weeks. > In that case, a wise business manager will reserve some funds for a rainy day > when business is a little slow, meaning you will still have some funds you > can put into your to-network big channel for other expenses, even as your > employee uses capacity there to actually spend their salary. > > It all balances out. > You only need to keep enough in your channels to cover your continuous > operational expenses, and employee salaries *are* operational expenses. > > > Suppose you now want to hire *another* throat-cutter. > You would only do that if business is booming, or in other words, if you have > accumulated enough money in your treasury to justify hiring yet another > employee. > > By induction, this will work regardless if you have 1 employee, or 1 million. > > Regards, > ZmnSCPxj > _______________________________________________ > bitcoin-dev mailing list > bitcoin-dev@lists.linuxfoundation.org > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev _______________________________________________ bitcoin-dev mailing list bitcoin-dev@lists.linuxfoundation.org https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
