Quote from: DooMAD on February 07, 2017, 10:04:42 AM

Quote from: kiklo on February 07, 2017, 12:26:50 AM

BTC miners & BTC nodes secure the BTC ONCHAIN Network.

LN Hubs will Secure the LN Notes, BTC miners have no power to determine how LN handles it's OFFCHAIN Note system. Wink

Your link above, the guy that wrote it is an idiot, he says and I quote

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Lightning Network transactions are bitcoin transactions.
It is incredibly important to remember this and repeat it to yourself over and over again.
The Lightning Network never holds custody of anyones funds.

Just a few lines down on the same page , he contradicts his earlier statement.

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The Lightning Network has problems with exchanging significant amounts of value.
For the Lightning Network to function, it requires that users and businesses lock up as much bitcoin as they would ever expect to transact over a given period of time.

See when people lie , like he did , when they keep talking , the contradictions appear. Wink

LN=Goldsmiths/Banks

History unlike humans does not lie.

Cool

That second part could probably have been phrased better, but if you've somehow come away with the impression that LN does hold custody of any funds, that's purely down to your misinterpretation of it. He's not lying, you're just looking for a problem that isn't really there and somehow twisting the words to suit your preferred meaning. Yes, for it to function, "it requires that users and businesses lock up as much bitcoin as they would ever expect to transact over a given period of time". That's how it works. You lock the total, then within that total you can send transactions back and forth. When you're done, the same total remains, no more, no less. I don't see how you think that's in any way a sign that someone can make some coins appear out of nowhere and then add them to the blockchain. It simply can't happen.

It will happen inbetween the software layers, BTC onchain will show 1BTC, and the LN will Represent it as 4 BTC for all LN contracts.
Or it could be as simple as 4 BTC were originally in the onchain address and LN represents 4 BTC on their offchain system, but does not fully lock the entirely of the amount, say they only lock 1 BTC and the user transmits the 3 out to another BTC onchain address, with the LN system none the wiser and still reporting their initial amount.

It is an offchain system, there is Absolutely No way to guarantee they won't counterfeit coins or fraction reserve the amounts.
You are trusting a 3rd Party LN to report accurate data , but in truth , you can not be 100% sure , until the BTC Onchain transactions has been confirmed.

Also LN does have penalties that can be triggered to steal from you and you will not receive a balance back.

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A breach remedy transaction goes beyond reclaiming the injured party's funds.
To discourage theft, the transaction also takes the entirety of the offending party's funds as a penalty.

FYI:
Onchain can be trusted, Offchain can never be trusted.