"It It's may fifth twenty nineteen and this is so three hundred ninety six let's talk bitcoin. Hey, folks, I'm Adam LeVine. And on today's episode bledstock, bitcoin, I'm here with Stephanie Murphy. Hi, Jonathan Melhem Andreas Anson Opelousas. Hello. So today, we're going to be discussing a couple of topics. We'll kick things off with the technical topic. At least a little technical on recently launched for developers loop out for lightning. Then later will dip our toes into the latest fork of a four controversy with lawsuits delistings and other allegations long lots of drama to see if anything sticks thanks to all the hosts and listeners for sitting on discussion, so lightning all it's been a long time coming. I'm honestly getting a little bit excited about it at this point. Technology's always been really promising, but they're all these little details, which might be insignificant in the big picture. But which matter a lot for usability, especially usability for people like me and really for the usefulness of the system, which brings me to a new improvement enlightening called, Lou bowed. Specifically what we're gonna be talking about today? I'm gonna read a little bit from the blog dot, lightning engineering law. Doug from their post on this in a section entitled loop out tale of lightning pizza one day, a new company launches that selling on the lightning network called backgammon's. And it turns out that they're selling lots of pizza, but over time the capacity of backgammon's channels, get filled with the bitcoin they've received on lightning at which point. They're able to accept more payments. Backgammon can then use lube out to move funds out of lightning into a bitcoin wallet, cold storage or currency Vianna exchange. This emptying of the channel allows them to then receive more payments and continue the cycle of selling pizza and looping out again further when a merchant like backgammon first joins the lighting network. They can use loop out to get initial receiving capacity as well as a result new recipients on the network, no longer need to rely on others to open a channel for them before they're able to start receiving payments. So capacity is kind of always been an issue within the lightning upright. It's been one of the big question marks is that unlike with bitcoin, you'd can't necessarily send your entire. Balance in a single transaction. You have to instead kind of utilize the network in order to route from hop to hop and each of those different hops might have different capacity limits. This is clearly trying to tackle that Andreas. Can you help us understand a little better? What's going on here? The fundamental issue to on the fan hair is not so much capacity. It's rather the lightning channels are a symmetric. Meaning that when you have a channel there is a local balance, a remote balanced, the local balances, the balance of Santos, you have on your side of the channel. And that's the amount that you can send out from that channel either when you're routing or making a payment yourself, and the remote balance is the balance that can be sent to Hugh that the other party holds on the channel that can be sent to you. And that's sets the limit on how much incoming payments who can have. Now, imagine you're running a store as in this example, and you have a bunch of incoming channels. With balance on the remote end, and you need that. So that people can send you payments or route payments to you, and let's say your stores successful. And so people make payments in some of that remote balance becomes local balance. Most to your side of the channel, which means you earned it great. So your local balances increase. In fact, keeps happening eventually you're going to run out of remote balance all of the channel capacity is going to be on your ends because you've already received all of it. Now, you have two options one is to have other people create new channels or close channels reopen channels. So the problem is rebalancing channel rebalancing is the idea and the way to solve that is effectively an atomic swap between on chain Anoff chain funds, which is called the submarine swab, and that type of swap is while loopholes or lupin implements salute belt is built on top of the technology that we were talking about a couple of weeks ago called submarine sense. And so this is another layer effect. Built on top of that framework. Yeah. So here's a simple example. I've got all of the balance on my end the channel, and I want to rebalance without closing opening channels incurring on chain payments. So what I do is I need to find someone who's willing to take a lightning payment for me. And in return, send me bitcoin, essentially swapping off chain payments for an on chain payments and wall lightning labs will to for you through this service loop out now, I could simply trust someone kind of like an exchange right where I make a deposit through lightning, and they then allow me to make a withdrawal on chain and making on blockchain withdrawal. But the problem without this trust, right? Because if I simply send them the lightning payments, and then they don't give me a non chain bitcoin payments in return. I've lost my money. It's their custody. We're talking about finding that person who's going to provide the other side of the payment is that something where loop out is a mechanism that we both us together to coordinate. The fact that we wanna trade but don't trust each other. Or when I used loop out at my actually using it with lightning, for example. Is there a company in the background that's gonna be providing the sort of liquidity via loop out? Yeah. So Luke out is a product offered by a single company that provides these trust less submarine. Swap. So you can swap on chain for off chain vice versa. It is an implementation of submarine swaps which is affected the protocol, which is a series of steps you take. If you want to trust la- swap between on chain off chain funds and that has been implemented in a product that's called loop out or lightning loop. So loop out of product by specific company that uses the protocol that is of marine sons and other people can use this same kind of concepts of Tomic swaps between. Chains and off chain funds to do the same thing of the trick. Here is that it's trust. Louis. What does that mean that means that instead of you blindly sending a payment over lightning in hoping they give you a non chain payments? In return. What happens is that is they may contain payments, which is effectively in escrow the can only be unlocked by the invoice receipts of lightning payments. Meaning once they've put that on chain, you can only claim"