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102 sats \ 1 reply \ @k00b 4h \ parent \ on: Lightning swaps *are* the connective tissue - btc++ Insider lightning
They're are technically unsettled but they are game-theoretically settled given the penalty (assuming it's economically and otherwise possible for parties to get transactions confirmed).
Are all but the oldest bitcoin transactions settled if reorgs are theoretically possible? Meaning, even what we consider "settled," an onchain transaction with N confirmations, can be unsettled. Settled is a matter of degree, and a matter of feasibility, cost, and consequences to the party trying to unsettle transactions, right?
It's kind of like the difference between a gold bar in my hand and a gold bar in a bank vault. You can steal either, perhaps one easier than the other, one with greater consequences than the other, so is the gold bar that's harder to steal with greater consequences the only gold bar that's mine? Or are both mine if it's improbable that someone would steal either gold bar?
Perhaps there's a distinction between what we mean by settled and confirmed. Both mean improbable to reverse, but confirmed is the kind of settled that only depends on the network continuing to behave honestly and self-interested long enough. But there are other kinds of settled.
While I'm rambling: this is the coolest thing about lightning and I'm surprised no one has done something as creative with game-theoretic settlement (settlement without confirmation). I haven't tried, and I'm probably wrong, but I'd bet you could make a decent side chain that solves the mass exit problem by designing incentives for the mass exit-ers to fork the side chain together (and avoid going onchain).
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