Makes sense. More straightforward than I would have guessed. It is basically a blockchain tranx that enables 0 time exchange of coins that both parties signed off on instead of the network signing off on the transx.
Is there any interest in applications that have LN enabled that parties can make an agreement based on set conditions lined out? Similar to smart contracts on ETH, but instead of the blockchain enforcing the contract, the LN regulates the conditions. When both parties sign the contract(actually sign each condition met,) then coins are exchanged. Correct?
I don't think LN will facilitate smart contracts like that. The limitations of that are due to transaction scripts since LN is really just a different way to make Bitcoin transactions.
What about "multi-party" transactions. Say I want to send 1 BTC to Alice, Bob, and Charlie. 0.4 to Alice, 0.5 to Bob, and 0.1 to Charlie. The current implementation does not allow this does it? Could this be alleviate with multiple keys signing off on my transx with a contract? Of course, if one of the third-parties refuses to sign, then the transx cannot commence, unless conditions say otherwise.
It is possible to have more than 2 parties in a payment channel, but it can get very messy very quickly due to the number of possible outcomes that could happen. The current lightning spec does not allow for more than 2 parties in a channel.