Lightning Network uses source-based routing. What that means is that the sender is responsible for finding a route to the payee. But because the sender doesn't know the balances of all channels along a possible route, the proposed route can fail for lack of liquidity. So the sender is forced to try routes until it stumbles upon one that has enough liquidity to relay the payment; it's a process of trial and error. To increase the likelihood of success the idea of splitting up a payments into smaller parts was floated early on in the development of Lightning Network. The idea was that multiple smaller payments were more likely to succeed than one big payment. But you still want all separate parts of such a payment to act as one single atomic payment, that either succeeds completely or doesn't succeed at all.

There is this cool trick you can do with Schnorr signatures. It is called Adaptor Signature (AS). An adaptor signature is an extra signature that, combined with the original signature, allow for revealing a value that was previously hidden. You can use this trick to solve trust problems as they appear in atomic swaps, coin swaps and Discreet Log Contracts (DLCs).

Signature Aggregation (SA) is a way to aggregate multiple signatures into a single signature. The single aggregate signature is smaller (in bytes) than the original signatures combined. It reduces transaction weight, meaning we can have more transactions per block, which is always a good thing. It's like 7zip for transactions. Signature Half Aggregation is a variant of SA that only aggregates half of each signature. It offers less compression, but it has the benefit of not requiring any interaction with the signers, whereas full aggregation does require cooperation of all the signers.

So two cool tricks, but the latter breaks the former when it is used for blockwide signature aggregation. This article explains the math behind it and why SA breaks AS

Lightning Network is a peer-to-peer payment network that runs on top of the Bitcoin Blockchain. Because it runs on top of the Blockchain it is called a layer-two solution, which groups it together with other solutions that have this property of being built on top of a Blockchain. Layer One is the base layer, where the Blockchain lives. Because of the inherent properties of Layer One, it is impossible to process large amounts of transactions in that layer. The Bitcoin Blockchain can famously process a mere seven transactions per second on average. This constraint was the main impetus for the creation of Layer Two solutions. Lightning Network, being a Layer Two solution, allows for near instant transactions, that can easily scale to millions of transactions per second.

I've been following Bitcoin and more importantly the Blockchain from the sidelines for a few years now, but I wanted to get my hands dirty. Obviously I could just download the Bitcoin Core executables from bitcoin.org, but I always feel it gives me more insight if I build something myself. Also it's was a nice test case for Bash on Windows.