No it is not real BTC on LN,
LN freezes the amount of BTC on the BTC onchain network,
what is transferred on LN is a representation of that value.
(No Different that when Banks allowed people to trade cash for gold.
The Gold is held somewhere else and the Cash is a representation of that amount of Gold.
Only redeemable upon request.)
IE: Banking (there is no difference between it & LN)
And here is the kicker, if LN is only a representation of a BTC, it is only a matter of time before a fractional BTC onchain is represented by more offchain on LN.
This becomes possible once LN can calculate how many people never remove their Locks on the BTC frozen on the BTC onchain network.
Study the history of Banking , this is exactly how they started.
LN freezes the amount of BTC on the BTC onchain network,
what is transferred on LN is a representation of that value.
(No Different that when Banks allowed people to trade cash for gold.
The Gold is held somewhere else and the Cash is a representation of that amount of Gold.
Only redeemable upon request.)
IE: Banking (there is no difference between it & LN)
And here is the kicker, if LN is only a representation of a BTC, it is only a matter of time before a fractional BTC onchain is represented by more offchain on LN.
This becomes possible once LN can calculate how many people never remove their Locks on the BTC frozen on the BTC onchain network.
Study the history of Banking , this is exactly how they started.
I can promise you that LN would be dead in the water if there was even a remote chance of fractional reserve or an increase in the total coin cap. It's one of those red lines that consensus will never cross. You won't be able to settle a total on the blockchain greater than that which was initially locked. All coins can be traced back to their coinbase origin, while sums created through fraction reserve would not have such an origin to be traceable to. Network rules wouldn't accept or validate a transaction where the output was greater than the input and the additional coins appeared from nowhere. Miners and nodes will never accept those particular rules changing.
LOL,
You think they are going to tell you it will have the ability to do fractional reserves.
It is an offchain representation , there is nothing stopping them from adding an update ,that allows fractional reserves.
It is just history repeating itself, learn from it or be enslaved by it, readers choice.
http://economics.stackexchange.com/questions/6970/when-was-fractional-reserve-banking-introduced
Quote
In the past, savers looking to keep their coins and valuables in safekeeping depositories deposited gold and silver at goldsmiths, receiving in exchange a note for their deposit (see Bank of Amsterdam). These notes gained acceptance as a medium of exchange for commercial transactions and thus became an early form of circulating paper money. As the notes were used directly in trade, the goldsmiths observed that people would not usually redeem all their notes at the same time, and they saw the opportunity to invest their coin reserves in interest-bearing loans and bills. This generated income for the goldsmiths but left them with more notes on issue than reserves with which to pay them. A process was started that altered the role of the goldsmiths from passive guardians of bullion, charging fees for safe storage, to interest-paying and interest-earning banks. Thus fractional-reserve banking was born.
LN = Goldsmiths, (which became Banks)
LN Coins = Notes
BTC = Gold
https://www.brainyquote.com/quotes/quotes/h/henryford136294.html
Quote
It is well enough that people of the nation do not understand our banking and monetary system, for if they did,
I believe there would be a revolution before tomorrow morning.
by Henry FordI believe there would be a revolution before tomorrow morning.
Updated for LN
Quote
It is well enough that people of the world do not understand that Lightening Network will usher in fractional reserve banking into the Crypto-Currencies system, for if they did,
I believe the Lightening Network concept would be dead before tomorrow morning.
by Kiklo I believe the Lightening Network concept would be dead before tomorrow morning.