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346 sats \ 6 replies \ @kristapsk 15 Jan \ on: We need to drain OTC desks. They are turning BTC into paper bitcoin_beginners
Lightning is not "wrapped bitcoin", it's bitcoin proper.
Only when the channel is closed it is settled with real btc until then in lightning you are transacting contracts of ownership for a certain value of sats locked in the channel, that are virtually considered as their future value in real sats by lightning wallets.
This is the same as any other wrapped btc, the difference is that lightning cannot be cheated.
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Lightning network involves parties exchanging co-signed fully valid Bitcoin transactions that can be broadcast to P2P network at any time. So it's completely different from wrapped bitcoin solutions.
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Yes, but from my point of view a btc transaction is real only when it is added to a block, everything else is a potential transaction that might or might not happen, for example if you lose the state of your ln wallet you will never be able to broadcast your closing transaction.
In the same way an unwrapping transaction is a potential transaction that does not yet exist in the blockchain, the difference is that lightning is ruled by code, you can broadcast the closing transaction yourself, while what we commonly refer as wrapped btc is ruled by trust of a third party that is supposed to generate said transaction on demand.
In fact Lightning doesn't require both end of the channel to be on the same blockchain.
It is very different from a technical point of view, but the abstract concept is very similar.