What are some misconceptions about the Lightning Network? How does the onion-routing work? How does channel funding work? Are there any security or legal risks to running a Lightning node? How far is the user experience development?

Chapters
0:00 Have you seen the video how banks bought bitcoin? It says that the Lightning Network will centralize bitcoin so that a few players have the power.
1:03 Two ways to resolve the increase in demand and limited capacity
2:28 Misunderstandings on how Lightning Network works
3:54 Lightning Network capabilities
6:46 How do routes across Lightning Network payment channels form? How does a node find an optimal path?
8:17 Source routing
9:06 Onion routing
12:11 If each Lightning Network channel needs funding to stay up, won't that lock a lot of value?
13:03 Ways to route something that is greater than the amount you have in your channel
14:35 A few articles have popped up about AML regulation and how it might be applied to Lightning nodes. Are node operators likely to face a lot of risk and why?
17:23 Please explain how using a Lightning enabled wallet will be like? There's a lot of confusion about channels and the need to open and close them.
20:35 I'm interested in running a Lightning node, where's the best place to start?

This is not a choice between on-chain and off-chain. A large portion of transaction volume has already been conducted off-chain (i.e. within the private databases of exchanges) for years; what second-layer solutions like the Lightning Network do is to allow for similar low-cost activity without sacrificing most of the security model and trustless nature of Bitcoin. Decentralisation is not a Boolean value, it is a range.

The Lightning Network is not only about payment channels, there is also routing between the payment channels of others. You do not need to open a channel with every party you want to transact with. If a merchant does open a channel, they do not have to close the channel in order to be paid.

LN Development Resources: http://dev.lightning.community/
LND Desktop Wallet - https://github.com/lightninglabs/ligh...
ACINQ's Lightning implementation: https://github.com/ACINQ/eclair
Blockstream's C-Lightning implementation: https://github.com/ElementsProject/li...
Zap, another Lightning wallet: http://zap.jackmallers.com/

More on contributors: http://lightning.community/release/so...

This question is from the patron-only live Q&A which took place on January 27th 2018. If you want early-access to talks and a chance to participate in the monthly live Q&As with Andreas, become a patron:   / aantonop  

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Andreas M. Antonopoulos is a technologist and serial entrepreneur who has become one of the most well-known and respected figures in bitcoin.

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