WEBVTT Kind: captions Language: en 00:00:00.000 --> 00:00:02.780 align:start position:0% you 00:00:02.780 --> 00:00:02.790 align:start position:0% 00:00:02.790 --> 00:00:17.109 align:start position:0% you 00:00:17.109 --> 00:00:17.119 align:start position:0% 00:00:17.119 --> 00:00:20.150 align:start position:0% very<00:00:18.119> pleased<00:00:18.539> to<00:00:18.570> have<00:00:19.020> Joseph<00:00:19.380> Boone<00:00:19.860> a 00:00:20.150 --> 00:00:20.160 align:start position:0% very pleased to have Joseph Boone a 00:00:20.160 --> 00:00:22.700 align:start position:0% very pleased to have Joseph Boone a co-founder<00:00:20.880> the<00:00:21.029> Lightning<00:00:21.420> Network<00:00:21.869> to 00:00:22.700 --> 00:00:22.710 align:start position:0% co-founder the Lightning Network to 00:00:22.710 --> 00:00:26.450 align:start position:0% co-founder the Lightning Network to present<00:00:23.130> today<00:00:23.580> on<00:00:23.880> state<00:00:24.810> channels<00:00:25.460> systemic 00:00:26.450 --> 00:00:26.460 align:start position:0% present today on state channels systemic 00:00:26.460 --> 00:00:28.820 align:start position:0% present today on state channels systemic security<00:00:27.000> considerations<00:00:27.779> and<00:00:28.050> solutions 00:00:28.820 --> 00:00:28.830 align:start position:0% security considerations and solutions 00:00:28.830 --> 00:00:37.400 align:start position:0% security considerations and solutions you<00:00:29.820> have<00:00:29.910> the<00:00:30.060> clicker<00:00:35.750> hi<00:00:36.750> everyone<00:00:37.260> um 00:00:37.400 --> 00:00:37.410 align:start position:0% you have the clicker hi everyone um 00:00:37.410 --> 00:00:40.370 align:start position:0% you have the clicker hi everyone um today<00:00:38.250> I'm<00:00:38.399> going<00:00:38.550> to<00:00:38.640> talk<00:00:38.850> about<00:00:39.350> how<00:00:40.350> to 00:00:40.370 --> 00:00:40.380 align:start position:0% today I'm going to talk about how to 00:00:40.380 --> 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in<00:00:47.430> the<00:00:47.520> coming<00:00:48.270> you<00:00:48.450> know<00:00:48.570> months 00:00:49.100 --> 00:00:49.110 align:start position:0% popular in the coming you know months 00:00:49.110 --> 00:00:51.740 align:start position:0% popular in the coming you know months and<00:00:49.200> years<00:00:49.440> ahead<00:00:50.060> state<00:00:51.060> channels<00:00:51.420> perhaps 00:00:51.740 --> 00:00:51.750 align:start position:0% and years ahead state channels perhaps 00:00:51.750 --> 00:00:53.840 align:start position:0% and years ahead state channels perhaps have<00:00:51.990> some<00:00:52.020> greater<00:00:52.890> complexity<00:00:53.520> when<00:00:53.760> it 00:00:53.840 --> 00:00:53.850 align:start position:0% have some greater complexity when it 00:00:53.850 --> 00:00:56.050 align:start position:0% have some greater complexity when it comes<00:00:54.030> to<00:00:54.210> certain<00:00:54.510> aspects<00:00:54.930> of<00:00:55.079> the<00:00:55.230> design 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align:start position:0% five channels with some end participants and<00:01:05.159> I<00:01:05.880> could<00:01:06.090> potentially<00:01:06.720> do<00:01:06.869> contracts 00:01:07.490 --> 00:01:07.500 align:start position:0% and I could potentially do contracts 00:01:07.500 --> 00:01:09.410 align:start position:0% and I could potentially do contracts with<00:01:07.710> potentially<00:01:08.490> everyone<00:01:09.030> in<00:01:09.149> the<00:01:09.240> room 00:01:09.410 --> 00:01:09.420 align:start position:0% with potentially everyone in the room 00:01:09.420 --> 00:01:12.380 align:start position:0% with potentially everyone in the room off<00:01:09.659> chain<00:01:10.530> but<00:01:10.829> ultimately<00:01:11.280> enforceable<00:01:12.180> on 00:01:12.380 --> 00:01:12.390 align:start position:0% off chain but ultimately enforceable on 00:01:12.390 --> 00:01:14.510 align:start position:0% off chain but ultimately enforceable on chain<00:01:12.780> by<00:01:13.380> having<00:01:13.770> the<00:01:13.890> payments<00:01:14.310> flow 00:01:14.510 --> 00:01:14.520 align:start position:0% chain by having the payments flow 00:01:14.520 --> 00:01:16.580 align:start position:0% chain by having the payments flow through<00:01:14.939> and<00:01:15.180> the<00:01:15.509> contract<00:01:16.049> states<00:01:16.320> flow 00:01:16.580 --> 00:01:16.590 align:start position:0% through and the contract states flow 00:01:16.590 --> 00:01:21.580 align:start position:0% through and the contract states flow through<00:01:16.920> between<00:01:17.159> multiple<00:01:17.729> participants 00:01:21.580 --> 00:01:21.590 align:start position:0% 00:01:21.590 --> 00:01:29.810 align:start position:0% the<00:01:22.590> clicker<00:01:22.950> doesn't<00:01:23.429> work<00:01:23.549> though 00:01:29.810 --> 00:01:29.820 align:start position:0% 00:01:29.820 --> 00:01:37.080 align:start position:0% this<00:01:30.820> one<00:01:32.010> got<00:01:33.010> it<00:01:33.510> alright<00:01:34.510> cool<00:01:35.220> so<00:01:36.220> on<00:01:36.909> the 00:01:37.080 --> 00:01:37.090 align:start position:0% this one got it alright cool so on the 00:01:37.090 --> 00:01:39.980 align:start position:0% this one got it alright cool so on the black<00:01:37.330> chain<00:01:37.950> economic<00:01:38.950> considerations<00:01:39.640> are 00:01:39.980 --> 00:01:39.990 align:start position:0% black chain economic considerations are 00:01:39.990 --> 00:01:44.609 align:start position:0% black chain economic considerations are I<00:01:40.990> mean<00:01:41.860> on<00:01:42.729> the<00:01:43.420> blockchain<00:01:43.630> adversarial 00:01:44.609 --> 00:01:44.619 align:start position:0% I mean on the blockchain adversarial 00:01:44.619 --> 00:01:46.410 align:start position:0% I mean on the blockchain adversarial economic<00:01:45.160> considerations<00:01:45.790> are<00:01:45.940> functionally 00:01:46.410 --> 00:01:46.420 align:start position:0% economic considerations are functionally 00:01:46.420 --> 00:01:48.570 align:start position:0% economic considerations are functionally security<00:01:46.900> contract<00:01:47.580> security 00:01:48.570 --> 00:01:48.580 align:start position:0% security contract security 00:01:48.580 --> 00:01:52.080 align:start position:0% security contract security considerations<00:01:49.860> the<00:01:50.860> primary<00:01:51.400> issue<00:01:51.610> is 00:01:52.080 --> 00:01:52.090 align:start position:0% considerations the primary issue is 00:01:52.090 --> 00:01:54.960 align:start position:0% considerations the primary issue is related<00:01:52.840> to<00:01:52.869> off<00:01:53.380> chain<00:01:53.800> contract<00:01:54.400> consensus 00:01:54.960 --> 00:01:54.970 align:start position:0% related to off chain contract consensus 00:01:54.970 --> 00:01:58.080 align:start position:0% related to off chain contract consensus because<00:01:55.720> this<00:01:56.320> is<00:01:56.560> sort<00:01:56.920> of<00:01:57.009> off<00:01:57.430> chain<00:01:57.880> you 00:01:58.080 --> 00:01:58.090 align:start position:0% because this is sort of off chain you 00:01:58.090 --> 00:02:00.359 align:start position:0% because this is sort of off chain you don't<00:01:58.270> have<00:01:58.540> the<00:01:59.409> blockchain<00:01:59.650> itself<00:02:00.220> to 00:02:00.359 --> 00:02:00.369 align:start position:0% don't have the blockchain itself to 00:02:00.369 --> 00:02:02.010 align:start position:0% don't have the blockchain itself to resolve<00:02:00.700> the<00:02:00.850> double<00:02:01.119> spend<00:02:01.330> problem<00:02:01.750> so<00:02:01.960> you 00:02:02.010 --> 00:02:02.020 align:start position:0% resolve the double spend problem so you 00:02:02.020 --> 00:02:05.040 align:start position:0% resolve the double spend problem so you resolve<00:02:02.530> that<00:02:02.800> through<00:02:03.460> economic<00:02:04.119> incentives 00:02:05.040 --> 00:02:05.050 align:start position:0% resolve that through economic incentives 00:02:05.050 --> 00:02:07.430 align:start position:0% resolve that through economic incentives and<00:02:05.259> structures<00:02:05.680> and<00:02:05.890> that<00:02:06.820> requires 00:02:07.430 --> 00:02:07.440 align:start position:0% and structures and that requires 00:02:07.440 --> 00:02:11.250 align:start position:0% and structures and that requires penalties<00:02:08.440> to<00:02:08.979> operate<00:02:09.489> went<00:02:10.090> to<00:02:10.390> be 00:02:11.250 --> 00:02:11.260 align:start position:0% penalties to operate went to be 00:02:11.260 --> 00:02:12.840 align:start position:0% penalties to operate went to be structured<00:02:11.739> when<00:02:12.010> you<00:02:12.340> are<00:02:12.430> not<00:02:12.580> operating 00:02:12.840 --> 00:02:12.850 align:start position:0% structured when you are not operating 00:02:12.850 --> 00:02:17.009 align:start position:0% structured when you are not operating correctly<00:02:13.209> and<00:02:14.250> that<00:02:15.250> requires<00:02:15.670> a<00:02:16.300> great<00:02:16.989> deal 00:02:17.009 --> 00:02:17.019 align:start position:0% correctly and that requires a great deal 00:02:17.019 --> 00:02:21.600 align:start position:0% correctly and that requires a great deal of<00:02:19.560> presupposition<00:02:20.560> when<00:02:20.830> it<00:02:20.950> comes<00:02:21.190> to<00:02:21.430> the 00:02:21.600 --> 00:02:21.610 align:start position:0% of presupposition when it comes to the 00:02:21.610 --> 00:02:25.380 align:start position:0% of presupposition when it comes to the design<00:02:22.019> and<00:02:23.019> there's<00:02:23.830> a<00:02:23.920> lot<00:02:24.400> of<00:02:24.670> structure 00:02:25.380 --> 00:02:25.390 align:start position:0% design and there's a lot of structure 00:02:25.390 --> 00:02:26.910 align:start position:0% design and there's a lot of structure that<00:02:25.420> you<00:02:25.660> have<00:02:25.780> to<00:02:25.930> consider<00:02:26.290> when<00:02:26.560> it<00:02:26.709> comes 00:02:26.910 --> 00:02:26.920 align:start position:0% that you have to consider when it comes 00:02:26.920 --> 00:02:28.820 align:start position:0% that you have to consider when it comes to<00:02:27.100> the<00:02:27.250> cost<00:02:27.489> of<00:02:27.730> the<00:02:27.790> enforcement<00:02:28.420> itself 00:02:28.820 --> 00:02:28.830 align:start position:0% to the cost of the enforcement itself 00:02:28.830 --> 00:02:32.430 align:start position:0% to the cost of the enforcement itself much<00:02:29.830> like<00:02:30.070> how<00:02:30.280> you<00:02:30.340> know<00:02:30.810> you<00:02:31.810> can<00:02:31.989> write<00:02:32.200> you 00:02:32.430 --> 00:02:32.440 align:start position:0% much like how you know you can write you 00:02:32.440 --> 00:02:34.920 align:start position:0% much like how you know you can write you know<00:02:32.530> a<00:02:32.560> thousand-page<00:02:33.130> contract<00:02:33.700> but<00:02:34.390> the 00:02:34.920 --> 00:02:34.930 align:start position:0% know a thousand-page contract but the 00:02:34.930 --> 00:02:36.930 align:start position:0% know a thousand-page contract but the your<00:02:35.170> legal<00:02:35.470> toss<00:02:35.709> will<00:02:35.920> probably<00:02:36.370> add<00:02:36.579> up 00:02:36.930 --> 00:02:36.940 align:start position:0% your legal toss will probably add up 00:02:36.940 --> 00:02:39.449 align:start position:0% your legal toss will probably add up when<00:02:37.150> you<00:02:37.360> ultimately<00:02:38.019> require<00:02:38.459> enforcement 00:02:39.449 --> 00:02:39.459 align:start position:0% when you ultimately require enforcement 00:02:39.459 --> 00:02:41.640 align:start position:0% when you ultimately require enforcement within<00:02:40.329> the<00:02:40.600> court<00:02:40.810> system<00:02:41.200> which<00:02:41.380> in<00:02:41.530> this 00:02:41.640 --> 00:02:41.650 align:start position:0% within the court system which in this 00:02:41.650 --> 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and<00:02:51.430> it's<00:02:51.610> not<00:02:51.790> enforceable 00:02:52.199 --> 00:02:52.209 align:start position:0% acting faulty and it's not enforceable 00:02:52.209 --> 00:02:55.860 align:start position:0% acting faulty and it's not enforceable on<00:02:52.510> chain<00:02:53.489> but<00:02:54.489> there<00:02:55.269> are<00:02:55.450> there<00:02:55.840> are 00:02:55.860 --> 00:02:55.870 align:start position:0% on chain but there are there are 00:02:55.870 --> 00:02:57.509 align:start position:0% on chain but there are there are possibilities<00:02:56.709> where<00:02:56.920> you<00:02:56.980> can<00:02:57.130> enforce 00:02:57.509 --> 00:02:57.519 align:start position:0% possibilities where you can enforce 00:02:57.519 --> 00:02:59.729 align:start position:0% possibilities where you can enforce multiple<00:02:58.239> states<00:02:58.510> on<00:02:58.690> chain<00:02:59.019> if<00:02:59.200> you<00:02:59.470> design 00:02:59.729 --> 00:02:59.739 align:start position:0% multiple states on chain if you design 00:02:59.739 --> 00:03:02.819 align:start position:0% multiple states on chain if you design the<00:02:59.890> contract<00:03:00.340> incorrectly<00:03:00.880> and<00:03:01.650> this<00:03:02.650> is<00:03:02.799> a 00:03:02.819 --> 00:03:02.829 align:start position:0% the contract incorrectly and this is a 00:03:02.829 --> 00:03:05.789 align:start position:0% the contract incorrectly and this is a huge<00:03:03.310> problem<00:03:03.640> to<00:03:04.239> if<00:03:04.540> this<00:03:05.200> actually<00:03:05.470> happens 00:03:05.789 --> 00:03:05.799 align:start position:0% huge problem to if this actually happens 00:03:05.799 --> 00:03:08.460 align:start position:0% huge problem to if this actually happens because<00:03:06.790> let's<00:03:07.180> say<00:03:07.390> you<00:03:07.450> have<00:03:07.810> some<00:03:08.079> option 00:03:08.460 --> 00:03:08.470 align:start position:0% because let's say you have some option 00:03:08.470 --> 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resolved at<00:03:16.360> ten<00:03:16.510> dollars<00:03:17.730> you're<00:03:18.730> going<00:03:19.120> to<00:03:19.299> want<00:03:19.600> to 00:03:19.710 --> 00:03:19.720 align:start position:0% at ten dollars you're going to want to 00:03:19.720 --> 00:03:21.509 align:start position:0% at ten dollars you're going to want to enforce<00:03:20.230> that<00:03:20.290> contract<00:03:20.470> on<00:03:21.070> the<00:03:21.280> blockchain 00:03:21.509 --> 00:03:21.519 align:start position:0% enforce that contract on the blockchain 00:03:21.519 --> 00:03:23.759 align:start position:0% enforce that contract on the blockchain as<00:03:21.850> soon<00:03:22.000> as<00:03:22.150> possible 00:03:23.759 --> 00:03:23.769 align:start position:0% as soon as possible 00:03:23.769 --> 00:03:26.880 align:start position:0% as soon as possible because<00:03:24.280> you<00:03:24.549> make<00:03:24.820> a<00:03:24.850> lot<00:03:24.970> more<00:03:25.269> money<00:03:25.890> so 00:03:26.880 --> 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position:0% to the uncertainty but these are also explicit<00:03:33.609> costs<00:03:34.000> right<00:03:34.239> you<00:03:34.750> will<00:03:34.900> outright 00:03:35.430 --> 00:03:35.440 align:start position:0% explicit costs right you will outright 00:03:35.440 --> 00:03:38.059 align:start position:0% explicit costs right you will outright pay<00:03:35.769> the<00:03:36.280> minor<00:03:36.519> or<00:03:36.820> validate<00:03:37.269> or<00:03:37.420> set<00:03:37.660> a 00:03:38.059 --> 00:03:38.069 align:start position:0% pay the minor or validate or set a 00:03:38.069 --> 00:03:41.490 align:start position:0% pay the minor or validate or set a higher<00:03:39.069> amount<00:03:39.540> purely<00:03:40.540> because<00:03:40.720> you're 00:03:41.490 --> 00:03:41.500 align:start position:0% higher amount purely because you're 00:03:41.500 --> 00:03:41.760 align:start position:0% higher amount purely because you're going 00:03:41.760 --> 00:03:41.770 align:start position:0% going 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know within some<00:03:52.240> larger<00:03:52.630> set<00:03:52.810> of<00:03:52.840> the<00:03:53.020> contract<00:03:54.510> and<00:03:56.790> this 00:03:57.780 --> 00:03:57.790 align:start position:0% some larger set of the contract and this 00:03:57.790 --> 00:04:00.360 align:start position:0% some larger set of the contract and this an<00:03:58.150> alternate<00:03:58.810> there<00:03:59.650> may<00:03:59.770> be<00:03:59.800> alternate 00:04:00.360 --> 00:04:00.370 align:start position:0% an alternate there may be alternate 00:04:00.370 --> 00:04:02.940 align:start position:0% an alternate there may be alternate solutions<00:04:00.970> but<00:04:01.210> this<00:04:01.630> is<00:04:01.780> the<00:04:02.020> you<00:04:02.680> know<00:04:02.710> this 00:04:02.940 --> 00:04:02.950 align:start position:0% solutions but this is the you know this 00:04:02.950 --> 00:04:05.340 align:start position:0% solutions but this is the you know this is<00:04:03.130> a<00:04:03.160> good<00:04:03.340> rule<00:04:03.520> of<00:04:03.550> thumb<00:04:03.700> for<00:04:03.880> now<00:04:04.350> you 00:04:05.340 --> 00:04:05.350 align:start position:0% is a good rule of thumb for now you 00:04:05.350 --> 00:04:07.050 align:start position:0% is a good rule of thumb for now you could<00:04:05.620> do<00:04:05.800> other<00:04:06.010> constructions<00:04:06.670> using 00:04:07.050 --> 00:04:07.060 align:start position:0% could do other constructions using 00:04:07.060 --> 00:04:08.670 align:start position:0% could do other constructions using different<00:04:07.870> types<00:04:08.050> of<00:04:08.260> like<00:04:08.440> cascading 00:04:08.670 --> 00:04:08.680 align:start position:0% different types of like cascading 00:04:08.680 --> 00:04:11.100 align:start position:0% different types of like cascading bonding<00:04:09.340> structures<00:04:10.060> but<00:04:10.330> that<00:04:10.690> could<00:04:10.870> end<00:04:10.990> up 00:04:11.100 --> 00:04:11.110 align:start position:0% bonding structures but that could end up 00:04:11.110 --> 00:04:14.250 align:start position:0% bonding structures but that could end up being<00:04:11.320> fairly<00:04:11.740> complex 00:04:14.250 --> 00:04:14.260 align:start position:0% being fairly complex 00:04:14.260 --> 00:04:15.780 align:start position:0% being fairly complex additionally<00:04:14.950> penalties<00:04:15.430> need<00:04:15.610> to<00:04:15.670> be 00:04:15.780 --> 00:04:15.790 align:start position:0% additionally penalties need to be 00:04:15.790 --> 00:04:19.470 align:start position:0% additionally penalties need to be predefined<00:04:17.459> you<00:04:18.459> could<00:04:18.700> have<00:04:18.940> some<00:04:19.209> type<00:04:19.450> of 00:04:19.470 --> 00:04:19.480 align:start position:0% predefined you could have some type of 00:04:19.480 --> 00:04:22.530 align:start position:0% predefined you could have some type of you<00:04:20.260> know<00:04:20.340> adjudicator<00:04:21.340> third<00:04:21.790> party<00:04:22.150> you 00:04:22.530 --> 00:04:22.540 align:start position:0% you know adjudicator third party you 00:04:22.540 --> 00:04:25.170 align:start position:0% you know adjudicator third party you know<00:04:22.660> end<00:04:22.980> participants<00:04:23.980> but<00:04:24.640> usually<00:04:25.120> if 00:04:25.170 --> 00:04:25.180 align:start position:0% know end participants but usually if 00:04:25.180 --> 00:04:27.450 align:start position:0% know end participants but usually if it's<00:04:25.300> a<00:04:25.390> two-party<00:04:25.870> contract<00:04:26.350> you<00:04:27.250> need<00:04:27.400> to 00:04:27.450 --> 00:04:27.460 align:start position:0% it's a two-party contract you need to 00:04:27.460 --> 00:04:29.430 align:start position:0% it's a two-party contract you need to pre<00:04:27.640> defined<00:04:27.790> everything<00:04:28.420> using<00:04:28.990> fidelity 00:04:29.430 --> 00:04:29.440 align:start position:0% pre defined everything using fidelity 00:04:29.440 --> 00:04:32.940 align:start position:0% pre defined everything using fidelity bonds<00:04:29.650> and<00:04:30.660> what<00:04:31.660> you're<00:04:31.840> functionally<00:04:32.650> doing 00:04:32.940 --> 00:04:32.950 align:start position:0% bonds and what you're functionally doing 00:04:32.950 --> 00:04:34.710 align:start position:0% bonds and what you're functionally doing is<00:04:33.070> you're<00:04:33.220> creating<00:04:33.250> the<00:04:33.880> incentives<00:04:34.510> for 00:04:34.710 --> 00:04:34.720 align:start position:0% is you're creating the incentives for 00:04:34.720 --> 00:04:37.140 align:start position:0% is you're creating the incentives for the<00:04:35.230> participants<00:04:35.920> to<00:04:36.160> be<00:04:36.250> staying<00:04:36.520> off<00:04:36.790> chain 00:04:37.140 --> 00:04:37.150 align:start position:0% the participants to be staying off chain 00:04:37.150 --> 00:04:39.420 align:start position:0% the participants to be staying off chain right<00:04:37.930> if<00:04:38.170> you<00:04:38.350> have<00:04:38.620> the<00:04:38.890> incentive 00:04:39.420 --> 00:04:39.430 align:start position:0% right if you have the incentive 00:04:39.430 --> 00:04:42.420 align:start position:0% right if you have the incentive structure<00:04:39.850> aligned<00:04:40.150> correctly<00:04:40.530> then<00:04:41.530> you 00:04:42.420 --> 00:04:42.430 align:start position:0% structure aligned correctly then you 00:04:42.430 --> 00:04:44.970 align:start position:0% structure aligned correctly then you know<00:04:42.550> we<00:04:43.120> can<00:04:43.150> attest<00:04:43.660> to<00:04:43.780> the<00:04:43.960> state<00:04:44.200> we<00:04:44.740> both 00:04:44.970 --> 00:04:44.980 align:start position:0% know we can attest to the state we both 00:04:44.980 --> 00:04:46.770 align:start position:0% know we can attest to the state we both agree<00:04:45.400> on<00:04:45.430> the<00:04:45.700> current<00:04:46.000> state<00:04:46.270> and<00:04:46.300> we<00:04:46.600> both 00:04:46.770 --> 00:04:46.780 align:start position:0% agree on the current state and we both 00:04:46.780 --> 00:04:52.520 align:start position:0% agree on the current state and we both know<00:04:47.020> if<00:04:47.080> we<00:04:47.320> deviate<00:04:47.670> that<00:04:48.670> we<00:04:49.270> will<00:04:49.480> not<00:04:49.660> win 00:04:52.520 --> 00:04:52.530 align:start position:0% 00:04:52.530 --> 00:04:54.570 align:start position:0% systemic<00:04:53.530> risks<00:04:53.860> are<00:04:53.980> also<00:04:54.100> something<00:04:54.430> to 00:04:54.570 --> 00:04:54.580 align:start position:0% systemic risks are also something to 00:04:54.580 --> 00:04:57.000 align:start position:0% systemic risks are also something to seriously<00:04:54.970> consider<00:04:55.180> math<00:04:55.900> spam<00:04:56.170> risks<00:04:56.590> etc 00:04:57.000 --> 00:04:57.010 align:start position:0% seriously consider math spam risks etc 00:04:57.010 --> 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current<00:05:04.090> area<00:05:04.450> of<00:05:04.540> research<00:05:05.010> but<00:05:06.010> this 00:05:06.210 --> 00:05:06.220 align:start position:0% is a current area of research but this 00:05:06.220 --> 00:05:08.460 align:start position:0% is a current area of research but this is<00:05:06.370> not<00:05:06.580> specific<00:05:07.270> to<00:05:07.300> channels<00:05:07.810> anything 00:05:08.460 --> 00:05:08.470 align:start position:0% is not specific to channels anything 00:05:08.470 --> 00:05:10.110 align:start position:0% is not specific to channels anything with<00:05:08.680> fidelity<00:05:09.040> bonds<00:05:09.490> are<00:05:09.640> going<00:05:09.880> to<00:05:09.970> have 00:05:10.110 --> 00:05:10.120 align:start position:0% with fidelity bonds are going to have 00:05:10.120 --> 00:05:12.090 align:start position:0% with fidelity bonds are going to have this<00:05:10.330> issue<00:05:10.480> and<00:05:10.870> it's<00:05:11.020> and<00:05:11.230> it's<00:05:11.740> a<00:05:11.860> fairly 00:05:12.090 --> 00:05:12.100 align:start position:0% this issue and it's and it's a fairly 00:05:12.100 --> 00:05:14.400 align:start position:0% this issue and it's and it's a fairly interesting<00:05:12.550> thing<00:05:12.970> just<00:05:13.150> resolved<00:05:13.600> and<00:05:14.230> the 00:05:14.400 --> 00:05:14.410 align:start position:0% interesting thing just resolved and the 00:05:14.410 --> 00:05:16.350 align:start position:0% interesting thing just resolved and the most<00:05:14.590> clean<00:05:15.070> way<00:05:15.340> to<00:05:15.370> resolve<00:05:15.850> a<00:05:15.970> lot<00:05:16.090> of<00:05:16.240> this 00:05:16.350 --> 00:05:16.360 align:start position:0% most clean way to resolve a lot of this 00:05:16.360 --> 00:05:18.720 align:start position:0% most clean way to resolve a lot of this is<00:05:16.540> to<00:05:16.630> be<00:05:16.750> using<00:05:17.050> relative<00:05:17.470> timestamps<00:05:18.100> when 00:05:18.720 --> 00:05:18.730 align:start position:0% is to be using relative timestamps when 00:05:18.730 --> 00:05:20.280 align:start position:0% is to be using relative timestamps when you're<00:05:18.880> using<00:05:19.090> a<00:05:19.270> relative<00:05:19.720> timestamp<00:05:20.200> of 00:05:20.280 --> 00:05:20.290 align:start position:0% you're using a relative timestamp of 00:05:20.290 --> 00:05:23.040 align:start position:0% you're using a relative timestamp of your<00:05:20.440> contract<00:05:21.360> generally<00:05:22.360> the<00:05:22.510> cost<00:05:22.810> of 00:05:23.040 --> 00:05:23.050 align:start position:0% your contract generally the cost of 00:05:23.050 --> 00:05:24.659 align:start position:0% your contract generally the cost of enforcement<00:05:23.650> is<00:05:23.710> going<00:05:23.950> to<00:05:24.040> be<00:05:24.160> relatively 00:05:24.659 --> 00:05:24.669 align:start position:0% enforcement is going to be relatively 00:05:24.669 --> 00:05:27.560 align:start position:0% enforcement is going to be relatively persistent<00:05:25.200> provided<00:05:26.200> that<00:05:26.350> the<00:05:26.470> size<00:05:26.680> of<00:05:26.980> the 00:05:27.560 --> 00:05:27.570 align:start position:0% persistent provided that the size of the 00:05:27.570 --> 00:05:30.800 align:start position:0% persistent provided that the size of the enforcement<00:05:28.570> of<00:05:28.750> the<00:05:29.050> attestation<00:05:29.560> is 00:05:30.800 --> 00:05:30.810 align:start position:0% enforcement of the attestation is 00:05:30.810 --> 00:05:34.590 align:start position:0% enforcement of the attestation is smaller<00:05:32.130> functionally<00:05:33.130> so<00:05:33.669> if<00:05:34.090> you're<00:05:34.450> making 00:05:34.590 --> 00:05:34.600 align:start position:0% smaller functionally so if you're making 00:05:34.600 --> 00:05:36.780 align:start position:0% smaller functionally so if you're making a<00:05:34.870> large<00:05:35.110> attestation<00:05:35.740> and<00:05:36.130> you're<00:05:36.610> making 00:05:36.780 --> 00:05:36.790 align:start position:0% a large attestation and you're making 00:05:36.790 --> 00:05:40.380 align:start position:0% a large attestation and you're making incorrect<00:05:37.570> attestation<00:05:38.760> the<00:05:39.760> enforcement<00:05:40.300> of 00:05:40.380 --> 00:05:40.390 align:start position:0% incorrect attestation the enforcement of 00:05:40.390 --> 00:05:42.420 align:start position:0% incorrect attestation the enforcement of that<00:05:40.419> is<00:05:40.870> probably<00:05:41.230> going<00:05:41.620> to<00:05:41.710> be<00:05:41.800> smaller<00:05:42.070> but 00:05:42.420 --> 00:05:42.430 align:start position:0% that is probably going to be smaller but 00:05:42.430 --> 00:05:44.340 align:start position:0% that is probably going to be smaller but it's<00:05:42.580> good<00:05:42.880> to<00:05:43.030> make<00:05:43.150> sure<00:05:43.180> that<00:05:43.480> it<00:05:43.630> is<00:05:43.780> that 00:05:44.340 --> 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you<00:05:55.979> know<00:05:56.069> like<00:05:56.340> a<00:05:56.870> contract<00:05:57.870> can<00:05:58.020> be<00:05:58.199> easily 00:05:58.400 --> 00:05:58.410 align:start position:0% you know like a contract can be easily 00:05:58.410 --> 00:06:00.589 align:start position:0% you know like a contract can be easily split<00:05:59.009> into<00:05:59.160> many<00:05:59.460> smaller<00:05:59.849> contracts<00:06:00.419> and 00:06:00.589 --> 00:06:00.599 align:start position:0% split into many smaller contracts and 00:06:00.599 --> 00:06:04.999 align:start position:0% split into many smaller contracts and when<00:06:00.720> you<00:06:00.930> do<00:06:01.110> that<00:06:01.879> that<00:06:02.879> allows<00:06:03.300> for<00:06:03.870> a<00:06:04.440> great 00:06:04.999 --> 00:06:05.009 align:start position:0% when you do that that allows for a great 00:06:05.009 --> 00:06:11.839 align:start position:0% when you do that that allows for a great deal<00:06:05.340> of<00:06:05.520> isolation<00:06:07.639> module<00:06:08.639> is<00:06:08.849> sorry<00:06:10.849> okay 00:06:11.839 --> 00:06:11.849 align:start position:0% deal of isolation module is sorry okay 00:06:11.849 --> 00:06:12.830 align:start position:0% deal of isolation module is sorry okay um 00:06:12.830 --> 00:06:12.840 align:start position:0% um 00:06:12.840 --> 00:06:15.020 align:start position:0% um modularity<00:06:13.770> in<00:06:14.069> this<00:06:14.250> case<00:06:14.460> is<00:06:14.669> more<00:06:14.909> of<00:06:14.970> like 00:06:15.020 --> 00:06:15.030 align:start position:0% modularity in this case is more of like 00:06:15.030 --> 00:06:17.300 align:start position:0% modularity in this case is more of like a<00:06:15.150> UT<00:06:15.509> Excel<00:06:15.780> model<00:06:16.110> and<00:06:16.259> that's<00:06:16.979> fairly 00:06:17.300 --> 00:06:17.310 align:start position:0% a UT Excel model and that's fairly 00:06:17.310 --> 00:06:20.330 align:start position:0% a UT Excel model and that's fairly that's<00:06:17.940> the<00:06:18.360> aut<00:06:18.690> X<00:06:18.900> model<00:06:19.229> is<00:06:19.440> interesting<00:06:20.220> in 00:06:20.330 --> 00:06:20.340 align:start position:0% that's the aut X model is interesting in 00:06:20.340 --> 00:06:22.930 align:start position:0% that's the aut X model is interesting in so<00:06:20.490> far<00:06:20.699> as<00:06:20.759> you<00:06:20.970> have<00:06:21.440> predefined<00:06:22.440> inputs 00:06:22.930 --> 00:06:22.940 align:start position:0% so far as you have predefined inputs 00:06:22.940 --> 00:06:26.719 align:start position:0% so far as you have predefined inputs have<00:06:23.940> some<00:06:24.240> set<00:06:24.419> of<00:06:24.810> predefined<00:06:25.259> outputs<00:06:25.729> and 00:06:26.719 --> 00:06:26.729 align:start position:0% have some set of predefined outputs and 00:06:26.729 --> 00:06:30.170 align:start position:0% have some set of predefined outputs and that<00:06:26.909> get<00:06:27.120> in<00:06:27.300> you<00:06:27.810> have<00:06:27.840> a<00:06:28.699> net<00:06:29.699> potential 00:06:30.170 --> 00:06:30.180 align:start position:0% that get in you have a net potential 00:06:30.180 --> 00:06:32.540 align:start position:0% that get in you have a net potential like<00:06:30.509> network<00:06:30.900> of<00:06:31.050> contracts<00:06:31.500> that<00:06:31.710> can<00:06:31.889> sort 00:06:32.540 --> 00:06:32.550 align:start position:0% like network of contracts that can sort 00:06:32.550 --> 00:06:35.860 align:start position:0% like network of contracts that can sort of<00:06:32.639> like<00:06:32.819> build<00:06:33.449> some<00:06:33.930> kind<00:06:34.110> of<00:06:34.169> circuit<00:06:34.470> path 00:06:35.860 --> 00:06:35.870 align:start position:0% of like build some kind of circuit path 00:06:35.870 --> 00:06:39.950 align:start position:0% of like build some kind of circuit path and<00:06:37.280> oh<00:06:38.810> sorry 00:06:39.950 --> 00:06:39.960 align:start position:0% and oh sorry 00:06:39.960 --> 00:06:45.620 align:start position:0% and oh sorry there<00:06:40.380> you<00:06:40.470> go<00:06:41.630> so<00:06:43.460> ultimately<00:06:44.460> you<00:06:44.880> always<00:06:45.330> do 00:06:45.620 --> 00:06:45.630 align:start position:0% there you go so ultimately you always do 00:06:45.630 --> 00:06:47.209 align:start position:0% there you go so ultimately you always do want<00:06:45.930> to<00:06:45.990> be<00:06:46.110> able<00:06:46.199> to<00:06:46.319> enforce<00:06:46.710> things<00:06:46.919> on 00:06:47.209 --> 00:06:47.219 align:start position:0% want to be able to enforce things on 00:06:47.219 --> 00:06:52.129 align:start position:0% want to be able to enforce things on chain<00:06:47.870> and<00:06:48.870> cannot<00:06:49.590> ignore<00:06:49.919> that<00:06:49.979> aspect<00:06:51.139> and 00:06:52.129 --> 00:06:52.139 align:start position:0% chain and cannot ignore that aspect and 00:06:52.139 --> 00:06:54.379 align:start position:0% chain and cannot ignore that aspect and when<00:06:52.889> you<00:06:52.979> compute<00:06:53.400> across<00:06:53.729> a<00:06:53.759> network<00:06:54.270> of 00:06:54.379 --> 00:06:54.389 align:start position:0% when you compute across a network of 00:06:54.389 --> 00:06:57.589 align:start position:0% when you compute across a network of participants<00:06:54.629> the<00:06:55.409> cost<00:06:55.620> multiply<00:06:56.159> now<00:06:57.150> a<00:06:57.180> lot 00:06:57.589 --> 00:06:57.599 align:start position:0% participants the cost multiply now a lot 00:06:57.599 --> 00:07:00.140 align:start position:0% participants the cost multiply now a lot of<00:06:57.690> this<00:06:57.840> sounds<00:06:58.080> really<00:06:58.500> really<00:06:58.800> scary<00:06:59.250> and 00:07:00.140 --> 00:07:00.150 align:start position:0% of this sounds really really scary and 00:07:00.150 --> 00:07:02.180 align:start position:0% of this sounds really really scary and you<00:07:00.840> know<00:07:00.930> this<00:07:01.110> is<00:07:01.259> about<00:07:01.469> risks<00:07:01.979> and 00:07:02.180 --> 00:07:02.190 align:start position:0% you know this is about risks and 00:07:02.190 --> 00:07:06.920 align:start position:0% you know this is about risks and solutions<00:07:03.139> and<00:07:04.550> I<00:07:05.550> think<00:07:05.580> when<00:07:06.360> you<00:07:06.449> look<00:07:06.690> at 00:07:06.920 --> 00:07:06.930 align:start position:0% solutions and I think when you look at 00:07:06.930 --> 00:07:09.409 align:start position:0% solutions and I think when you look at these<00:07:07.830> types<00:07:08.069> of<00:07:08.250> constructions<00:07:08.849> right<00:07:09.150> what 00:07:09.409 --> 00:07:09.419 align:start position:0% these types of constructions right what 00:07:09.419 --> 00:07:10.760 align:start position:0% these types of constructions right what you<00:07:09.659> have<00:07:09.840> are<00:07:10.080> you<00:07:10.259> have<00:07:10.349> multiple 00:07:10.760 --> 00:07:10.770 align:start position:0% you have are you have multiple 00:07:10.770 --> 00:07:13.399 align:start position:0% you have are you have multiple participants<00:07:11.159> that<00:07:12.060> want<00:07:12.419> to<00:07:13.080> be<00:07:13.169> able<00:07:13.259> to 00:07:13.399 --> 00:07:13.409 align:start position:0% participants that want to be able to 00:07:13.409 --> 00:07:15.170 align:start position:0% participants that want to be able to transact<00:07:13.830> with<00:07:14.130> anyone<00:07:14.610> else<00:07:14.789> in<00:07:14.940> the<00:07:15.029> network 00:07:15.170 --> 00:07:15.180 align:start position:0% transact with anyone else in the network 00:07:15.180 --> 00:07:17.779 align:start position:0% transact with anyone else in the network right<00:07:15.690> so<00:07:15.930> I<00:07:16.139> have<00:07:16.440> let's<00:07:16.979> say<00:07:17.130> I'm<00:07:17.219> Alice<00:07:17.610> I 00:07:17.779 --> 00:07:17.789 align:start position:0% right so I have let's say I'm Alice I 00:07:17.789 --> 00:07:19.640 align:start position:0% right so I have let's say I'm Alice I want<00:07:18.180> I<00:07:18.419> want<00:07:18.779> to<00:07:18.840> have<00:07:18.990> some<00:07:19.349> type<00:07:19.529> of 00:07:19.640 --> 00:07:19.650 align:start position:0% want I want to have some type of 00:07:19.650 --> 00:07:21.140 align:start position:0% want I want to have some type of financial<00:07:19.949> contract<00:07:20.520> let's<00:07:20.729> say<00:07:20.849> it's<00:07:20.969> some 00:07:21.140 --> 00:07:21.150 align:start position:0% financial contract let's say it's some 00:07:21.150 --> 00:07:23.240 align:start position:0% financial contract let's say it's some options<00:07:21.840> contract<00:07:22.319> of<00:07:22.469> some<00:07:22.620> kind<00:07:22.919> or<00:07:23.099> some 00:07:23.240 --> 00:07:23.250 align:start position:0% options contract of some kind or some 00:07:23.250 --> 00:07:25.209 align:start position:0% options contract of some kind or some futures<00:07:23.580> contract<00:07:24.000> whatever<00:07:24.300> it<00:07:24.419> may<00:07:24.539> be<00:07:24.569> and 00:07:25.209 --> 00:07:25.219 align:start position:0% futures contract whatever it may be and 00:07:25.219 --> 00:07:29.089 align:start position:0% futures contract whatever it may be and it's<00:07:26.219> a<00:07:26.370> conditional<00:07:26.969> payment<00:07:27.800> with<00:07:28.800> some 00:07:29.089 --> 00:07:29.099 align:start position:0% it's a conditional payment with some 00:07:29.099 --> 00:07:31.670 align:start position:0% it's a conditional payment with some terms<00:07:29.430> hdl-c<00:07:30.029> referring<00:07:30.690> to<00:07:30.870> you<00:07:31.349> have<00:07:31.469> some 00:07:31.670 --> 00:07:31.680 align:start position:0% terms hdl-c referring to you have some 00:07:31.680 --> 00:07:36.019 align:start position:0% terms hdl-c referring to you have some contract<00:07:32.190> term<00:07:32.479> and<00:07:33.479> some<00:07:34.050> expert<00:07:34.819> that<00:07:35.819> can 00:07:36.019 --> 00:07:36.029 align:start position:0% contract term and some expert that can 00:07:36.029 --> 00:07:37.670 align:start position:0% contract term and some expert that can be<00:07:36.150> refunded<00:07:36.630> and<00:07:36.779> cancellation<00:07:37.440> of<00:07:37.500> that 00:07:37.670 --> 00:07:37.680 align:start position:0% be refunded and cancellation of that 00:07:37.680 --> 00:07:42.200 align:start position:0% be refunded and cancellation of that contract<00:07:40.099> so<00:07:41.099> ideally<00:07:41.759> you<00:07:41.789> want<00:07:42.090> to<00:07:42.120> be 00:07:42.200 --> 00:07:42.210 align:start position:0% contract so ideally you want to be 00:07:42.210 --> 00:07:44.600 align:start position:0% contract so ideally you want to be constructing<00:07:42.810> this<00:07:42.900> off<00:07:43.110> chain<00:07:43.380> so<00:07:43.830> if<00:07:44.340> I'm 00:07:44.600 --> 00:07:44.610 align:start position:0% constructing this off chain so if I'm 00:07:44.610 --> 00:07:47.180 align:start position:0% constructing this off chain so if I'm Alice<00:07:45.029> I<00:07:45.240> don't<00:07:45.599> have<00:07:46.020> any<00:07:46.349> commute<00:07:46.949> any 00:07:47.180 --> 00:07:47.190 align:start position:0% Alice I don't have any commute any 00:07:47.190 --> 00:07:50.620 align:start position:0% Alice I don't have any commute any communication<00:07:48.029> on<00:07:48.180> chain<00:07:48.569> with<00:07:49.169> Dave<00:07:49.409> so<00:07:50.130> I 00:07:50.620 --> 00:07:50.630 align:start position:0% communication on chain with Dave so I 00:07:50.630 --> 00:07:53.990 align:start position:0% communication on chain with Dave so I have<00:07:51.630> I<00:07:51.840> have<00:07:52.110> some<00:07:52.289> on<00:07:52.469> chain<00:07:52.770> record<00:07:53.430> some 00:07:53.990 --> 00:07:54.000 align:start position:0% have I have some on chain record some 00:07:54.000 --> 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on<00:08:01.289> chain<00:08:01.590> but<00:08:02.279> I<00:08:02.580> elect<00:08:03.149> to<00:08:03.270> do<00:08:03.389> it<00:08:03.539> off 00:08:03.680 --> 00:08:03.690 align:start position:0% this on chain but I elect to do it off 00:08:03.690 --> 00:08:07.459 align:start position:0% this on chain but I elect to do it off chain<00:08:04.050> because<00:08:04.380> it's<00:08:04.529> cheaper<00:08:04.889> etc<00:08:05.669> etc<00:08:06.139> if<00:08:07.139> at 00:08:07.459 --> 00:08:07.469 align:start position:0% chain because it's cheaper etc etc if at 00:08:07.469 --> 00:08:08.860 align:start position:0% chain because it's cheaper etc etc if at any<00:08:07.620> time<00:08:07.949> either<00:08:08.250> party 00:08:08.860 --> 00:08:08.870 align:start position:0% any time either party 00:08:08.870 --> 00:08:12.100 align:start position:0% any time either party can<00:08:08.990> prove<00:08:09.740> the<00:08:09.950> attestations<00:08:10.460> on<00:08:10.910> chain<00:08:11.240> so 00:08:12.100 --> 00:08:12.110 align:start position:0% can prove the attestations on chain so 00:08:12.110 --> 00:08:14.080 align:start position:0% can prove the attestations on chain so you<00:08:12.950> know<00:08:13.070> like<00:08:13.310> let's<00:08:13.520> say<00:08:13.640> if<00:08:13.670> Bob<00:08:13.910> and 00:08:14.080 --> 00:08:14.090 align:start position:0% you know like let's say if Bob and 00:08:14.090 --> 00:08:17.190 align:start position:0% you know like let's say if Bob and Carols<00:08:14.360> disconnected<00:08:14.990> they<00:08:15.530> can<00:08:15.740> go<00:08:16.370> talk<00:08:16.610> to 00:08:17.190 --> 00:08:17.200 align:start position:0% Carols disconnected they can go talk to 00:08:17.200 --> 00:08:20.740 align:start position:0% Carols disconnected they can go talk to the<00:08:18.200> blockchain<00:08:18.440> but<00:08:19.430> Alice<00:08:20.210> and<00:08:20.360> Dave<00:08:20.480> still 00:08:20.740 --> 00:08:20.750 align:start position:0% the blockchain but Alice and Dave still 00:08:20.750 --> 00:08:22.480 align:start position:0% the blockchain but Alice and Dave still remain<00:08:21.050> on/off<00:08:21.500> chain<00:08:21.950> and<00:08:22.190> it's<00:08:22.310> fairly 00:08:22.480 --> 00:08:22.490 align:start position:0% remain on/off chain and it's fairly 00:08:22.490 --> 00:08:26.620 align:start position:0% remain on/off chain and it's fairly efficient<00:08:23.980> however<00:08:24.980> the<00:08:25.550> problem<00:08:26.090> from<00:08:26.390> this 00:08:26.620 --> 00:08:26.630 align:start position:0% efficient however the problem from this 00:08:26.630 --> 00:08:29.590 align:start position:0% efficient however the problem from this is<00:08:26.900> that<00:08:27.370> when<00:08:28.370> you<00:08:28.520> attest<00:08:28.850> on<00:08:29.120> chain<00:08:29.420> the 00:08:29.590 --> 00:08:29.600 align:start position:0% is that when you attest on chain the 00:08:29.600 --> 00:08:33.220 align:start position:0% is that when you attest on chain the cost<00:08:29.840> can<00:08:30.170> be<00:08:30.230> higher<00:08:30.910> a<00:08:31.910> lot<00:08:32.360> of<00:08:32.480> the<00:08:32.600> benefits 00:08:33.220 --> 00:08:33.230 align:start position:0% cost can be higher a lot of the benefits 00:08:33.230 --> 00:08:35.410 align:start position:0% cost can be higher a lot of the benefits of<00:08:33.410> this<00:08:33.530> technology<00:08:34.400> is<00:08:34.850> that<00:08:34.880> you<00:08:35.120> can 00:08:35.410 --> 00:08:35.420 align:start position:0% of this technology is that you can 00:08:35.420 --> 00:08:39.010 align:start position:0% of this technology is that you can resolve<00:08:35.870> a<00:08:36.170> lot<00:08:36.980> of<00:08:37.240> incentive<00:08:38.240> structures<00:08:38.750> on 00:08:39.010 --> 00:08:39.020 align:start position:0% resolve a lot of incentive structures on 00:08:39.020 --> 00:08:41.580 align:start position:0% resolve a lot of incentive structures on the<00:08:39.530> blockchain<00:08:39.770> so<00:08:40.280> an<00:08:40.640> example<00:08:40.820> would<00:08:41.450> be 00:08:41.580 --> 00:08:41.590 align:start position:0% the blockchain so an example would be 00:08:41.590 --> 00:08:44.710 align:start position:0% the blockchain so an example would be like<00:08:42.590> I<00:08:42.710> was<00:08:42.830> talking<00:08:43.190> like<00:08:43.910> Zuko<00:08:44.270> was<00:08:44.420> talking 00:08:44.710 --> 00:08:44.720 align:start position:0% like I was talking like Zuko was talking 00:08:44.720 --> 00:08:47.530 align:start position:0% like I was talking like Zuko was talking to<00:08:44.780> me<00:08:44.900> about<00:08:45.140> the<00:08:45.410> the<00:08:46.070> sort<00:08:46.730> of<00:08:46.790> like<00:08:47.000> a<00:08:47.030> free 00:08:47.530 --> 00:08:47.540 align:start position:0% to me about the the sort of like a free 00:08:47.540 --> 00:08:49.900 align:start position:0% to me about the the sort of like a free option<00:08:47.720> problem<00:08:48.320> right<00:08:48.560> last<00:08:49.550> night<00:08:49.730> we're 00:08:49.900 --> 00:08:49.910 align:start position:0% option problem right last night we're 00:08:49.910 --> 00:08:52.390 align:start position:0% option problem right last night we're talking<00:08:50.300> about<00:08:50.360> that<00:08:50.720> and<00:08:50.960> the<00:08:51.830> free<00:08:52.010> option 00:08:52.390 --> 00:08:52.400 align:start position:0% talking about that and the free option 00:08:52.400 --> 00:08:54.850 align:start position:0% talking about that and the free option problem<00:08:52.820> is<00:08:52.970> functionally<00:08:53.540> that<00:08:53.810> one<00:08:54.410> person 00:08:54.850 --> 00:08:54.860 align:start position:0% problem is functionally that one person 00:08:54.860 --> 00:08:56.950 align:start position:0% problem is functionally that one person can<00:08:55.160> start<00:08:55.940> a<00:08:56.090> contract<00:08:56.300> and<00:08:56.780> the<00:08:56.840> other 00:08:56.950 --> 00:08:56.960 align:start position:0% can start a contract and the other 00:08:56.960 --> 00:08:59.500 align:start position:0% can start a contract and the other person<00:08:57.380> can<00:08:57.730> they<00:08:58.730> have<00:08:58.820> a<00:08:58.850> free<00:08:59.090> option<00:08:59.420> of 00:08:59.500 --> 00:08:59.510 align:start position:0% person can they have a free option of 00:08:59.510 --> 00:09:02.140 align:start position:0% person can they have a free option of whether<00:08:59.660> to<00:08:59.870> accept<00:09:00.200> it<00:09:00.350> or<00:09:00.470> not<00:09:00.530> and<00:09:01.000> even<00:09:02.000> if 00:09:02.140 --> 00:09:02.150 align:start position:0% whether to accept it or not and even if 00:09:02.150 --> 00:09:04.090 align:start position:0% whether to accept it or not and even if you<00:09:02.390> resolve<00:09:02.960> like<00:09:03.290> with<00:09:03.440> the<00:09:03.560> Daleks<00:09:03.890> talk 00:09:04.090 --> 00:09:04.100 align:start position:0% you resolve like with the Daleks talk 00:09:04.100 --> 00:09:06.310 align:start position:0% you resolve like with the Daleks talk even<00:09:04.370> if<00:09:04.610> you<00:09:04.730> resolve<00:09:05.030> certain<00:09:05.690> aspects<00:09:06.200> of 00:09:06.310 --> 00:09:06.320 align:start position:0% even if you resolve certain aspects of 00:09:06.320 --> 00:09:08.800 align:start position:0% even if you resolve certain aspects of sharding<00:09:06.740> and<00:09:07.180> efficiencies<00:09:08.180> related<00:09:08.660> to 00:09:08.800 --> 00:09:08.810 align:start position:0% sharding and efficiencies related to 00:09:08.810 --> 00:09:11.770 align:start position:0% sharding and efficiencies related to that<00:09:09.430> what<00:09:10.430> a<00:09:10.670> lot<00:09:11.180> of<00:09:11.330> the<00:09:11.420> channel 00:09:11.770 --> 00:09:11.780 align:start position:0% that what a lot of the channel 00:09:11.780 --> 00:09:14.650 align:start position:0% that what a lot of the channel technology<00:09:12.440> gives<00:09:12.680> you<00:09:12.890> is<00:09:13.040> the<00:09:13.400> ability<00:09:13.610> to<00:09:14.390> a 00:09:14.650 --> 00:09:14.660 align:start position:0% technology gives you is the ability to a 00:09:14.660 --> 00:09:16.870 align:start position:0% technology gives you is the ability to a demise<00:09:15.140> a<00:09:15.380> lot<00:09:15.620> of<00:09:15.650> the<00:09:15.980> contracts<00:09:16.670> themselves 00:09:16.870 --> 00:09:16.880 align:start position:0% demise a lot of the contracts themselves 00:09:16.880 --> 00:09:19.510 align:start position:0% demise a lot of the contracts themselves so<00:09:17.870> that<00:09:18.080> you<00:09:18.290> can<00:09:18.530> make<00:09:18.770> the<00:09:19.010> individual 00:09:19.510 --> 00:09:19.520 align:start position:0% so that you can make the individual 00:09:19.520 --> 00:09:22.150 align:start position:0% so that you can make the individual contract<00:09:20.030> terms<00:09:20.240> incredibly<00:09:20.990> small<00:09:21.260> and<00:09:21.620> do<00:09:22.130> a 00:09:22.150 --> 00:09:22.160 align:start position:0% contract terms incredibly small and do a 00:09:22.160 --> 00:09:24.820 align:start position:0% contract terms incredibly small and do a tit<00:09:22.430> for<00:09:22.460> tat<00:09:22.820> increase<00:09:23.390> of<00:09:23.630> the<00:09:24.440> actual 00:09:24.820 --> 00:09:24.830 align:start position:0% tit for tat increase of the actual 00:09:24.830 --> 00:09:26.710 align:start position:0% tit for tat increase of the actual contract<00:09:25.250> so<00:09:25.640> let's<00:09:25.910> say<00:09:26.090> I<00:09:26.120> wanted<00:09:26.480> to<00:09:26.570> enter 00:09:26.710 --> 00:09:26.720 align:start position:0% contract so let's say I wanted to enter 00:09:26.720 --> 00:09:29.710 align:start position:0% contract so let's say I wanted to enter into<00:09:26.960> an<00:09:27.140> options<00:09:27.500> contract<00:09:28.010> with<00:09:28.160> someone<00:09:28.720> or 00:09:29.710 --> 00:09:29.720 align:start position:0% into an options contract with someone or 00:09:29.720 --> 00:09:32.590 align:start position:0% into an options contract with someone or some<00:09:29.930> futures<00:09:30.260> contracts<00:09:30.890> I<00:09:31.040> can<00:09:31.760> make<00:09:31.970> can 00:09:32.590 --> 00:09:32.600 align:start position:0% some futures contracts I can make can 00:09:32.600 --> 00:09:36.280 align:start position:0% some futures contracts I can make can design<00:09:33.110> a<00:09:33.140> contract<00:09:33.710> for<00:09:33.950> 10<00:09:34.400> sets<00:09:34.640> and<00:09:35.290> the 00:09:36.280 --> 00:09:36.290 align:start position:0% design a contract for 10 sets and the 00:09:36.290 --> 00:09:38.560 align:start position:0% design a contract for 10 sets and the free<00:09:36.590> age<00:09:36.710> the<00:09:37.160> the<00:09:37.670> free<00:09:37.880> option<00:09:38.180> problem 00:09:38.560 --> 00:09:38.570 align:start position:0% free age the the free option problem 00:09:38.570 --> 00:09:40.360 align:start position:0% free age the the free option problem starts<00:09:38.870> becoming<00:09:39.200> negligible<00:09:39.890> to<00:09:40.040> the<00:09:40.130> point 00:09:40.360 --> 00:09:40.370 align:start position:0% starts becoming negligible to the point 00:09:40.370 --> 00:09:42.160 align:start position:0% starts becoming negligible to the point where<00:09:40.520> it<00:09:40.610> doesn't<00:09:40.760> even<00:09:40.970> matter<00:09:41.270> and<00:09:41.630> you<00:09:42.140> can 00:09:42.160 --> 00:09:42.170 align:start position:0% where it doesn't even matter and you can 00:09:42.170 --> 00:09:44.470 align:start position:0% where it doesn't even matter and you can do<00:09:42.500> that<00:09:42.680> you<00:09:43.130> know<00:09:43.280> ten<00:09:43.640> thousand<00:09:44.060> times<00:09:44.180> to 00:09:44.470 --> 00:09:44.480 align:start position:0% do that you know ten thousand times to 00:09:44.480 --> 00:09:46.120 align:start position:0% do that you know ten thousand times to create<00:09:44.630> something<00:09:45.140> with<00:09:45.260> real<00:09:45.470> value<00:09:45.890> and 00:09:46.120 --> 00:09:46.130 align:start position:0% create something with real value and 00:09:46.130 --> 00:09:49.710 align:start position:0% create something with real value and ultimately<00:09:46.670> have<00:09:47.300> it<00:09:47.480> enforceable<00:09:48.110> on<00:09:48.320> chain 00:09:49.710 --> 00:09:49.720 align:start position:0% ultimately have it enforceable on chain 00:09:49.720 --> 00:09:54.730 align:start position:0% ultimately have it enforceable on chain however<00:09:51.100> with<00:09:52.100> complex<00:09:52.670> contracts<00:09:53.590> there<00:09:54.590> is 00:09:54.730 --> 00:09:54.740 align:start position:0% however with complex contracts there is 00:09:54.740 --> 00:09:56.500 align:start position:0% however with complex contracts there is some<00:09:54.950> issues<00:09:55.340> when<00:09:55.550> it<00:09:55.580> comes<00:09:55.670> to<00:09:56.060> requiring 00:09:56.500 --> 00:09:56.510 align:start position:0% some issues when it comes to requiring 00:09:56.510 --> 00:09:58.450 align:start position:0% some issues when it comes to requiring the<00:09:56.780> participants<00:09:57.500> to<00:09:57.620> enforce<00:09:58.010> a<00:09:58.160> lot<00:09:58.310> of 00:09:58.450 --> 00:09:58.460 align:start position:0% the participants to enforce a lot of 00:09:58.460 --> 00:10:02.680 align:start position:0% the participants to enforce a lot of these<00:09:58.580> things<00:10:00.580> but<00:10:01.580> instead<00:10:01.910> of<00:10:02.240> computing 00:10:02.680 --> 00:10:02.690 align:start position:0% these things but instead of computing 00:10:02.690 --> 00:10:04.450 align:start position:0% these things but instead of computing the<00:10:02.780> nor<00:10:03.050> contract<00:10:03.530> on<00:10:03.680> chain<00:10:04.010> you<00:10:04.190> should<00:10:04.370> be 00:10:04.450 --> 00:10:04.460 align:start position:0% the nor contract on chain you should be 00:10:04.460 --> 00:10:08.410 align:start position:0% the nor contract on chain you should be attesting<00:10:04.970> to<00:10:05.030> the<00:10:05.900> result<00:10:06.290> and<00:10:07.300> earlier<00:10:08.300> in 00:10:08.410 --> 00:10:08.420 align:start position:0% attesting to the result and earlier in 00:10:08.420 --> 00:10:10.180 align:start position:0% attesting to the result and earlier in the<00:10:08.540> day<00:10:08.690> there<00:10:08.900> was<00:10:08.990> a<00:10:09.020> talk<00:10:09.290> about<00:10:09.560> true<00:10:09.950> bits 00:10:10.180 --> 00:10:10.190 align:start position:0% the day there was a talk about true bits 00:10:10.190 --> 00:10:11.830 align:start position:0% the day there was a talk about true bits so<00:10:10.460> let's<00:10:10.700> talk<00:10:10.850> about<00:10:10.910> doing<00:10:11.330> a<00:10:11.480> true<00:10:11.690> bit 00:10:11.830 --> 00:10:11.840 align:start position:0% so let's talk about doing a true bit 00:10:11.840 --> 00:10:14.500 align:start position:0% so let's talk about doing a true bit type<00:10:12.080> construction<00:10:12.770> on<00:10:13.300> channels<00:10:14.300> and 00:10:14.500 --> 00:10:14.510 align:start position:0% type construction on channels and 00:10:14.510 --> 00:10:18.540 align:start position:0% type construction on channels and especially<00:10:15.080> in<00:10:15.380> network<00:10:15.680> of<00:10:15.830> channels 00:10:18.540 --> 00:10:18.550 align:start position:0% 00:10:18.550 --> 00:10:21.580 align:start position:0% instead<00:10:19.550> instead<00:10:20.000> in<00:10:20.450> this<00:10:20.630> case<00:10:20.900> when<00:10:21.440> you 00:10:21.580 --> 00:10:21.590 align:start position:0% instead instead in this case when you 00:10:21.590 --> 00:10:22.440 align:start position:0% instead instead in this case when you are<00:10:21.680> testing<00:10:21.980> on 00:10:22.440 --> 00:10:22.450 align:start position:0% are testing on 00:10:22.450 --> 00:10:25.080 align:start position:0% are testing on Chane<00:10:22.690> both<00:10:23.650> participants<00:10:24.370> end<00:10:24.700> up<00:10:24.850> funding 00:10:25.080 --> 00:10:25.090 align:start position:0% Chane both participants end up funding 00:10:25.090 --> 00:10:27.870 align:start position:0% Chane both participants end up funding with<00:10:25.510> Carol<00:10:25.900> doing<00:10:26.140> like<00:10:26.590> a<00:10:26.620> like<00:10:27.250> she<00:10:27.670> just 00:10:27.870 --> 00:10:27.880 align:start position:0% with Carol doing like a like she just 00:10:27.880 --> 00:10:29.370 align:start position:0% with Carol doing like a like she just selects<00:10:28.180> where<00:10:28.390> the<00:10:28.480> funds<00:10:28.750> come<00:10:28.990> from<00:10:29.260> in 00:10:29.370 --> 00:10:29.380 align:start position:0% selects where the funds come from in 00:10:29.380 --> 00:10:32.220 align:start position:0% selects where the funds come from in this<00:10:29.500> case<00:10:29.740> it's<00:10:29.950> her<00:10:30.070> own<00:10:30.550> funds<00:10:30.880> and<00:10:31.230> Carol 00:10:32.220 --> 00:10:32.230 align:start position:0% this case it's her own funds and Carol 00:10:32.230 --> 00:10:34.830 align:start position:0% this case it's her own funds and Carol is<00:10:32.410> functionally<00:10:33.040> saying<00:10:33.340> okay<00:10:34.240> here<00:10:34.600> is<00:10:34.720> the 00:10:34.830 --> 00:10:34.840 align:start position:0% is functionally saying okay here is the 00:10:34.840 --> 00:10:37.590 align:start position:0% is functionally saying okay here is the contract<00:10:35.580> here<00:10:36.580> are<00:10:36.670> the<00:10:36.730> inputs<00:10:37.270> to<00:10:37.450> that 00:10:37.590 --> 00:10:37.600 align:start position:0% contract here are the inputs to that 00:10:37.600 --> 00:10:40.350 align:start position:0% contract here are the inputs to that contract<00:10:37.990> I'm<00:10:38.410> saying<00:10:39.190> and<00:10:39.400> Carol<00:10:40.000> is<00:10:40.090> saying 00:10:40.350 --> 00:10:40.360 align:start position:0% contract I'm saying and Carol is saying 00:10:40.360 --> 00:10:44.130 align:start position:0% contract I'm saying and Carol is saying here<00:10:41.050> are<00:10:41.230> also<00:10:41.500> the<00:10:42.040> end<00:10:42.570> computed<00:10:43.570> results 00:10:44.130 --> 00:10:44.140 align:start position:0% here are also the end computed results 00:10:44.140 --> 00:10:47.160 align:start position:0% here are also the end computed results of<00:10:44.290> this<00:10:44.800> contract<00:10:45.280> so<00:10:46.120> Carol<00:10:46.510> actually<00:10:46.930> isn't 00:10:47.160 --> 00:10:47.170 align:start position:0% of this contract so Carol actually isn't 00:10:47.170 --> 00:10:48.720 align:start position:0% of this contract so Carol actually isn't asking<00:10:47.410> the<00:10:47.770> blockchain<00:10:48.220> to<00:10:48.340> compute 00:10:48.720 --> 00:10:48.730 align:start position:0% asking the blockchain to compute 00:10:48.730 --> 00:10:52.350 align:start position:0% asking the blockchain to compute anything<00:10:49.000> beyond<00:10:49.870> this<00:10:50.650> attestation<00:10:51.360> because 00:10:52.350 --> 00:10:52.360 align:start position:0% anything beyond this attestation because 00:10:52.360 --> 00:10:54.510 align:start position:0% anything beyond this attestation because this<00:10:52.570> this<00:10:52.870> individual<00:10:53.350> contract<00:10:54.220> let's<00:10:54.400> say 00:10:54.510 --> 00:10:54.520 align:start position:0% this this individual contract let's say 00:10:54.520 --> 00:10:58.650 align:start position:0% this this individual contract let's say is<00:10:54.580> incredibly<00:10:55.150> complex<00:10:55.630> in<00:10:55.870> some<00:10:56.080> manner<00:10:57.660> but 00:10:58.650 --> 00:10:58.660 align:start position:0% is incredibly complex in some manner but 00:10:58.660 --> 00:11:00.750 align:start position:0% is incredibly complex in some manner but she's<00:10:59.050> saying<00:10:59.230> the<00:10:59.380> blockchain<00:10:59.590> hey<00:11:00.430> I'm 00:11:00.750 --> 00:11:00.760 align:start position:0% she's saying the blockchain hey I'm 00:11:00.760 --> 00:11:02.880 align:start position:0% she's saying the blockchain hey I'm putting<00:11:01.150> up<00:11:01.480> let's<00:11:02.050> say<00:11:02.260> let's<00:11:02.620> say<00:11:02.710> the 00:11:02.880 --> 00:11:02.890 align:start position:0% putting up let's say let's say the 00:11:02.890 --> 00:11:05.040 align:start position:0% putting up let's say let's say the contract<00:11:03.310> is<00:11:03.580> a<00:11:03.820> hundred<00:11:04.270> hundred<00:11:04.840> dollar 00:11:05.040 --> 00:11:05.050 align:start position:0% contract is a hundred hundred dollar 00:11:05.050 --> 00:11:07.380 align:start position:0% contract is a hundred hundred dollar equivalent<00:11:05.470> and<00:11:05.890> she<00:11:06.760> puts<00:11:07.000> up<00:11:07.180> another 00:11:07.380 --> 00:11:07.390 align:start position:0% equivalent and she puts up another 00:11:07.390 --> 00:11:10.740 align:start position:0% equivalent and she puts up another hundred<00:11:08.380> dollar<00:11:08.560> equivalent<00:11:09.160> and<00:11:09.340> says<00:11:09.550> I<00:11:09.820> am 00:11:10.740 --> 00:11:10.750 align:start position:0% hundred dollar equivalent and says I am 00:11:10.750 --> 00:11:13.470 align:start position:0% hundred dollar equivalent and says I am saying<00:11:11.110> that<00:11:11.350> I<00:11:11.860> get<00:11:12.280> a<00:11:12.460> hundred<00:11:12.820> dollars<00:11:13.150> I'm 00:11:13.470 --> 00:11:13.480 align:start position:0% saying that I get a hundred dollars I'm 00:11:13.480 --> 00:11:15.990 align:start position:0% saying that I get a hundred dollars I'm also<00:11:13.840> bonding<00:11:14.680> a<00:11:14.830> hundred<00:11:15.250> dollars<00:11:15.580> with<00:11:15.760> some 00:11:15.990 --> 00:11:16.000 align:start position:0% also bonding a hundred dollars with some 00:11:16.000 --> 00:11:18.930 align:start position:0% also bonding a hundred dollars with some time<00:11:16.270> component<00:11:16.720> before<00:11:17.500> I<00:11:17.530> get<00:11:17.800> refunded<00:11:18.190> so 00:11:18.930 --> 00:11:18.940 align:start position:0% time component before I get refunded so 00:11:18.940 --> 00:11:21.180 align:start position:0% time component before I get refunded so let's<00:11:19.150> say<00:11:19.330> she<00:11:19.360> has<00:11:19.600> to<00:11:19.930> wait<00:11:20.080> another<00:11:20.440> day<00:11:20.830> so 00:11:21.180 --> 00:11:21.190 align:start position:0% let's say she has to wait another day so 00:11:21.190 --> 00:11:23.940 align:start position:0% let's say she has to wait another day so perhaps<00:11:21.700> three<00:11:22.390> or<00:11:22.420> four<00:11:22.780> however<00:11:23.290> long<00:11:23.650> it<00:11:23.800> is 00:11:23.940 --> 00:11:23.950 align:start position:0% perhaps three or four however long it is 00:11:23.950 --> 00:11:28.950 align:start position:0% perhaps three or four however long it is before<00:11:24.700> she<00:11:24.760> can<00:11:25.150> get<00:11:25.540> her<00:11:25.720> money<00:11:25.900> back<00:11:27.960> so 00:11:28.950 --> 00:11:28.960 align:start position:0% before she can get her money back so 00:11:28.960 --> 00:11:32.730 align:start position:0% before she can get her money back so what<00:11:29.740> she's<00:11:29.980> saying<00:11:30.250> is<00:11:30.520> if<00:11:30.760> I'm<00:11:31.390> wrong<00:11:31.690> we<00:11:32.530> can 00:11:32.730 --> 00:11:32.740 align:start position:0% what she's saying is if I'm wrong we can 00:11:32.740 --> 00:11:35.370 align:start position:0% what she's saying is if I'm wrong we can do<00:11:32.920> the<00:11:33.070> full<00:11:33.310> computation<00:11:34.180> on<00:11:34.330> Shane<00:11:34.660> but<00:11:35.260> we 00:11:35.370 --> 00:11:35.380 align:start position:0% do the full computation on Shane but we 00:11:35.380 --> 00:11:37.590 align:start position:0% do the full computation on Shane but we don't<00:11:35.590> need<00:11:35.860> to<00:11:35.920> right<00:11:36.340> now<00:11:36.550> I'm<00:11:36.790> saying<00:11:37.390> this 00:11:37.590 --> 00:11:37.600 align:start position:0% don't need to right now I'm saying this 00:11:37.600 --> 00:11:39.270 align:start position:0% don't need to right now I'm saying this is<00:11:37.780> the<00:11:37.900> result<00:11:38.230> I'm<00:11:38.350> telling<00:11:38.830> you<00:11:38.950> this<00:11:39.130> is 00:11:39.270 --> 00:11:39.280 align:start position:0% is the result I'm telling you this is 00:11:39.280 --> 00:11:41.460 align:start position:0% is the result I'm telling you this is the<00:11:39.430> result<00:11:39.760> you<00:11:39.880> don't<00:11:40.120> every<00:11:40.870> every<00:11:41.290> single 00:11:41.460 --> 00:11:41.470 align:start position:0% the result you don't every every single 00:11:41.470 --> 00:11:43.320 align:start position:0% the result you don't every every single node<00:11:41.890> on<00:11:42.220> the<00:11:42.250> blockchain<00:11:42.580> does<00:11:42.880> not<00:11:43.030> need<00:11:43.210> to 00:11:43.320 --> 00:11:43.330 align:start position:0% node on the blockchain does not need to 00:11:43.330 --> 00:11:47.940 align:start position:0% node on the blockchain does not need to compute<00:11:43.660> this<00:11:45.510> so<00:11:46.510> she<00:11:46.990> puts<00:11:47.200> up<00:11:47.320> the<00:11:47.440> bond<00:11:47.680> and 00:11:47.940 --> 00:11:47.950 align:start position:0% compute this so she puts up the bond and 00:11:47.950 --> 00:11:50.070 align:start position:0% compute this so she puts up the bond and after<00:11:48.640> some<00:11:48.880> end<00:11:49.090> period<00:11:49.390> of<00:11:49.600> time<00:11:49.780> let's<00:11:50.020> say 00:11:50.070 --> 00:11:50.080 align:start position:0% after some end period of time let's say 00:11:50.080 --> 00:11:52.500 align:start position:0% after some end period of time let's say over<00:11:50.410> these<00:11:50.920> four<00:11:51.220> days<00:11:51.400> she<00:11:52.180> gets<00:11:52.390> her 00:11:52.500 --> 00:11:52.510 align:start position:0% over these four days she gets her 00:11:52.510 --> 00:11:54.690 align:start position:0% over these four days she gets her payment<00:11:52.930> Alice<00:11:53.500> and<00:11:53.680> Bob<00:11:53.800> normally<00:11:54.280> computes 00:11:54.690 --> 00:11:54.700 align:start position:0% payment Alice and Bob normally computes 00:11:54.700 --> 00:11:57.060 align:start position:0% payment Alice and Bob normally computes it<00:11:54.820> off<00:11:54.940> blockchain<00:11:55.450> because<00:11:55.870> you<00:11:56.740> know<00:11:56.860> like 00:11:57.060 --> 00:11:57.070 align:start position:0% it off blockchain because you know like 00:11:57.070 --> 00:11:58.740 align:start position:0% it off blockchain because you know like their<00:11:57.220> computing<00:11:57.670> they're<00:11:58.060> communicating 00:11:58.740 --> 00:11:58.750 align:start position:0% their computing they're communicating 00:11:58.750 --> 00:12:01.500 align:start position:0% their computing they're communicating normally<00:11:59.370> in<00:12:00.370> this<00:12:00.550> case<00:12:00.760> Bob<00:12:00.970> and<00:12:01.150> Carol<00:12:01.420> are 00:12:01.500 --> 00:12:01.510 align:start position:0% normally in this case Bob and Carol are 00:12:01.510 --> 00:12:03.210 align:start position:0% normally in this case Bob and Carol are not<00:12:01.720> communicating<00:12:02.020> normally<00:12:02.740> so<00:12:02.920> they<00:12:03.040> need 00:12:03.210 --> 00:12:03.220 align:start position:0% not communicating normally so they need 00:12:03.220 --> 00:12:07.770 align:start position:0% not communicating normally so they need to<00:12:03.280> go<00:12:03.400> to<00:12:03.460> the<00:12:03.640> blockchain<00:12:05.610> and<00:12:06.610> that's<00:12:07.540> kind 00:12:07.770 --> 00:12:07.780 align:start position:0% to go to the blockchain and that's kind 00:12:07.780 --> 00:12:10.740 align:start position:0% to go to the blockchain and that's kind of<00:12:07.810> a<00:12:07.900> good<00:12:07.990> situation<00:12:08.200> if<00:12:08.710> you're<00:12:08.950> Carol<00:12:09.750> you 00:12:10.740 --> 00:12:10.750 align:start position:0% of a good situation if you're Carol you 00:12:10.750 --> 00:12:12.630 align:start position:0% of a good situation if you're Carol you put<00:12:10.960> up<00:12:11.050> some<00:12:11.230> bond<00:12:11.470> you<00:12:11.950> get<00:12:12.100> your<00:12:12.220> bond<00:12:12.430> back 00:12:12.630 --> 00:12:12.640 align:start position:0% put up some bond you get your bond back 00:12:12.640 --> 00:12:14.520 align:start position:0% put up some bond you get your bond back you<00:12:13.180> also<00:12:13.360> get<00:12:13.600> the<00:12:13.690> payment<00:12:14.020> from<00:12:14.170> Bob<00:12:14.350> and 00:12:14.520 --> 00:12:14.530 align:start position:0% you also get the payment from Bob and 00:12:14.530 --> 00:12:16.650 align:start position:0% you also get the payment from Bob and then<00:12:15.100> you<00:12:15.340> can<00:12:15.490> deliver<00:12:15.790> the<00:12:16.000> payment<00:12:16.330> to<00:12:16.450> Dave 00:12:16.650 --> 00:12:16.660 align:start position:0% then you can deliver the payment to Dave 00:12:16.660 --> 00:12:18.810 align:start position:0% then you can deliver the payment to Dave remember<00:12:17.410> in<00:12:17.500> this<00:12:17.620> case<00:12:17.680> Bob<00:12:18.100> and<00:12:18.310> Carol<00:12:18.640> are 00:12:18.810 --> 00:12:18.820 align:start position:0% remember in this case Bob and Carol are 00:12:18.820 --> 00:12:22.200 align:start position:0% remember in this case Bob and Carol are sort<00:12:19.540> of<00:12:19.600> like<00:12:19.980> intermediary<00:12:20.980> actors<00:12:21.760> who<00:12:22.060> you 00:12:22.200 --> 00:12:22.210 align:start position:0% sort of like intermediary actors who you 00:12:22.210 --> 00:12:24.750 align:start position:0% sort of like intermediary actors who you don't<00:12:22.360> really<00:12:22.630> trust<00:12:22.870> in<00:12:23.380> this<00:12:24.310> situation 00:12:24.750 --> 00:12:24.760 align:start position:0% don't really trust in this situation 00:12:24.760 --> 00:12:27.510 align:start position:0% don't really trust in this situation Alice<00:12:25.150> is<00:12:25.270> paying<00:12:25.510> Dave<00:12:25.980> but<00:12:26.980> Alice<00:12:27.310> doesn't 00:12:27.510 --> 00:12:27.520 align:start position:0% Alice is paying Dave but Alice doesn't 00:12:27.520 --> 00:12:29.760 align:start position:0% Alice is paying Dave but Alice doesn't have<00:12:27.760> on<00:12:28.090> blockchain<00:12:28.620> construction<00:12:29.620> with 00:12:29.760 --> 00:12:29.770 align:start position:0% have on blockchain construction with 00:12:29.770 --> 00:12:32.550 align:start position:0% have on blockchain construction with Dave<00:12:29.980> so<00:12:30.310> Alice<00:12:30.940> has<00:12:31.690> the<00:12:31.840> contract<00:12:32.260> flow 00:12:32.550 --> 00:12:32.560 align:start position:0% Dave so Alice has the contract flow 00:12:32.560 --> 00:12:34.500 align:start position:0% Dave so Alice has the contract flow through<00:12:32.860> Bob<00:12:33.040> and<00:12:33.340> then<00:12:33.520> to<00:12:33.700> Carol 00:12:34.500 --> 00:12:34.510 align:start position:0% through Bob and then to Carol 00:12:34.510 --> 00:12:37.470 align:start position:0% through Bob and then to Carol Dave<00:12:35.310> but<00:12:36.310> let's<00:12:36.460> say<00:12:36.580> Carol<00:12:36.970> is<00:12:37.120> a<00:12:37.150> malicious 00:12:37.470 --> 00:12:37.480 align:start position:0% Dave but let's say Carol is a malicious 00:12:37.480 --> 00:12:39.600 align:start position:0% Dave but let's say Carol is a malicious actor<00:12:37.990> and<00:12:38.170> wants<00:12:38.980> to<00:12:39.100> deceive<00:12:39.400> the 00:12:39.600 --> 00:12:39.610 align:start position:0% actor and wants to deceive the 00:12:39.610 --> 00:12:41.160 align:start position:0% actor and wants to deceive the blockchain<00:12:39.850> what<00:12:40.360> happens<00:12:40.660> in<00:12:40.810> this<00:12:40.960> case 00:12:41.160 --> 00:12:41.170 align:start position:0% blockchain what happens in this case 00:12:41.170 --> 00:12:45.660 align:start position:0% blockchain what happens in this case right<00:12:41.610> in<00:12:42.610> this<00:12:42.940> case<00:12:43.350> Bob<00:12:44.350> is<00:12:44.680> asked<00:12:45.100> Bob 00:12:45.660 --> 00:12:45.670 align:start position:0% right in this case Bob is asked Bob 00:12:45.670 --> 00:12:48.270 align:start position:0% right in this case Bob is asked Bob enforces<00:12:46.570> this<00:12:46.780> and<00:12:47.050> said<00:12:47.680> tells<00:12:48.070> the 00:12:48.270 --> 00:12:48.280 align:start position:0% enforces this and said tells the 00:12:48.280 --> 00:12:50.490 align:start position:0% enforces this and said tells the blockchain<00:12:48.520> hey<00:12:48.940> Carol<00:12:49.900> is<00:12:50.050> lying 00:12:50.490 --> 00:12:50.500 align:start position:0% blockchain hey Carol is lying 00:12:50.500 --> 00:12:53.160 align:start position:0% blockchain hey Carol is lying you<00:12:51.160> should<00:12:51.370> compute<00:12:51.760> this<00:12:52.000> and<00:12:52.270> Bob<00:12:52.960> can 00:12:53.160 --> 00:12:53.170 align:start position:0% you should compute this and Bob can 00:12:53.170 --> 00:12:54.780 align:start position:0% you should compute this and Bob can similarly<00:12:53.410> put<00:12:53.890> up<00:12:54.010> a<00:12:54.100> separate<00:12:54.400> bond<00:12:54.610> to 00:12:54.780 --> 00:12:54.790 align:start position:0% similarly put up a separate bond to 00:12:54.790 --> 00:12:58.740 align:start position:0% similarly put up a separate bond to discourage<00:12:55.240> Bob<00:12:55.750> from<00:12:56.170> you<00:12:56.380> know<00:12:57.090> from<00:12:58.090> overly 00:12:58.740 --> 00:12:58.750 align:start position:0% discourage Bob from you know from overly 00:12:58.750 --> 00:13:01.110 align:start position:0% discourage Bob from you know from overly requiring<00:12:59.320> the<00:12:59.620> blockchain<00:13:00.040> to<00:13:00.160> compute<00:13:00.520> too 00:13:01.110 --> 00:13:01.120 align:start position:0% requiring the blockchain to compute too 00:13:01.120 --> 00:13:05.340 align:start position:0% requiring the blockchain to compute too much<00:13:02.580> let's<00:13:03.580> say<00:13:03.700> Bob<00:13:03.850> is<00:13:03.910> correct<00:13:04.420> everyone 00:13:05.340 --> 00:13:05.350 align:start position:0% much let's say Bob is correct everyone 00:13:05.350 --> 00:13:07.290 align:start position:0% much let's say Bob is correct everyone all<00:13:05.590> the<00:13:05.650> nodes<00:13:06.010> compute<00:13:06.430> this<00:13:06.580> and<00:13:06.820> they<00:13:07.120> say 00:13:07.290 --> 00:13:07.300 align:start position:0% all the nodes compute this and they say 00:13:07.300 --> 00:13:08.790 align:start position:0% all the nodes compute this and they say oh<00:13:07.450> yeah<00:13:07.750> Carol<00:13:08.200> made<00:13:08.350> an<00:13:08.470> incorrect 00:13:08.790 --> 00:13:08.800 align:start position:0% oh yeah Carol made an incorrect 00:13:08.800 --> 00:13:10.830 align:start position:0% oh yeah Carol made an incorrect attestation<00:13:09.340> Carol<00:13:10.180> should<00:13:10.300> lose<00:13:10.510> her<00:13:10.630> bond 00:13:10.830 --> 00:13:10.840 align:start position:0% attestation Carol should lose her bond 00:13:10.840 --> 00:13:13.800 align:start position:0% attestation Carol should lose her bond and<00:13:11.110> she<00:13:11.740> loses<00:13:11.920> her<00:13:12.130> bond<00:13:12.400> above<00:13:12.730> and<00:13:12.970> this 00:13:13.800 --> 00:13:13.810 align:start position:0% and she loses her bond above and this 00:13:13.810 --> 00:13:15.540 align:start position:0% and she loses her bond above and this construction<00:13:14.320> allows<00:13:14.830> for<00:13:15.130> a<00:13:15.160> minimization 00:13:15.540 --> 00:13:15.550 align:start position:0% construction allows for a minimization 00:13:15.550 --> 00:13:17.910 align:start position:0% construction allows for a minimization of<00:13:16.060> the<00:13:16.600> amount<00:13:16.870> of<00:13:16.960> computation<00:13:17.290> that<00:13:17.680> you 00:13:17.910 --> 00:13:17.920 align:start position:0% of the amount of computation that you 00:13:17.920 --> 00:13:20.030 align:start position:0% of the amount of computation that you need<00:13:18.400> to<00:13:18.550> do<00:13:18.670> on<00:13:18.820> the<00:13:18.910> blockchain<00:13:19.120> entirely 00:13:20.030 --> 00:13:20.040 align:start position:0% need to do on the blockchain entirely 00:13:20.040 --> 00:13:23.370 align:start position:0% need to do on the blockchain entirely and<00:13:21.040> this<00:13:21.250> is<00:13:21.370> using<00:13:21.790> a<00:13:21.940> construction<00:13:22.570> on<00:13:23.110> top 00:13:23.370 --> 00:13:23.380 align:start position:0% and this is using a construction on top 00:13:23.380 --> 00:13:26.580 align:start position:0% and this is using a construction on top of<00:13:23.560> this<00:13:24.370> type<00:13:24.810> this<00:13:25.810> type<00:13:25.990> of<00:13:26.020> construction 00:13:26.580 --> 00:13:26.590 align:start position:0% of this type this type of construction 00:13:26.590 --> 00:13:29.430 align:start position:0% of this type this type of construction allows<00:13:26.830> for<00:13:27.100> you<00:13:27.190> to<00:13:27.460> do<00:13:28.060> this<00:13:28.210> in<00:13:28.510> a<00:13:29.110> network 00:13:29.430 --> 00:13:29.440 align:start position:0% allows for you to do this in a network 00:13:29.440 --> 00:13:33.120 align:start position:0% allows for you to do this in a network of<00:13:29.560> channels<00:13:31.260> additionally<00:13:32.260> if<00:13:32.500> you<00:13:33.040> know 00:13:33.120 --> 00:13:33.130 align:start position:0% of channels additionally if you know 00:13:33.130 --> 00:13:34.950 align:start position:0% of channels additionally if you know like<00:13:33.400> a<00:13:33.580> concern<00:13:34.000> would<00:13:34.150> be<00:13:34.210> well<00:13:34.600> if<00:13:34.840> I'm 00:13:34.950 --> 00:13:34.960 align:start position:0% like a concern would be well if I'm 00:13:34.960 --> 00:13:37.380 align:start position:0% like a concern would be well if I'm Carol<00:13:35.260> I<00:13:35.380> don't<00:13:35.410> have<00:13:35.620> enough<00:13:35.860> money<00:13:36.040> I<00:13:37.000> want 00:13:37.380 --> 00:13:37.390 align:start position:0% Carol I don't have enough money I want 00:13:37.390 --> 00:13:39.180 align:start position:0% Carol I don't have enough money I want to<00:13:37.480> put<00:13:37.600> up<00:13:37.690> this<00:13:37.840> bond<00:13:38.110> what<00:13:38.530> do<00:13:38.590> I<00:13:38.680> do<00:13:38.740> if 00:13:39.180 --> 00:13:39.190 align:start position:0% to put up this bond what do I do if 00:13:39.190 --> 00:13:40.710 align:start position:0% to put up this bond what do I do if you're<00:13:39.670> a<00:13:39.700> third<00:13:39.880> party<00:13:40.210> it's<00:13:40.330> not<00:13:40.510> an<00:13:40.600> issue 00:13:40.710 --> 00:13:40.720 align:start position:0% you're a third party it's not an issue 00:13:40.720 --> 00:13:44.220 align:start position:0% you're a third party it's not an issue because<00:13:41.640> well<00:13:42.640> you<00:13:43.480> know<00:13:43.630> the<00:13:43.780> inputs<00:13:44.110> you 00:13:44.220 --> 00:13:44.230 align:start position:0% because well you know the inputs you 00:13:44.230 --> 00:13:46.650 align:start position:0% because well you know the inputs you know<00:13:44.440> the<00:13:44.560> outputs<00:13:44.950> you<00:13:45.490> can<00:13:45.670> compute<00:13:46.060> it<00:13:46.150> you 00:13:46.650 --> 00:13:46.660 align:start position:0% know the outputs you can compute it you 00:13:46.660 --> 00:13:48.480 align:start position:0% know the outputs you can compute it you know<00:13:46.840> you<00:13:47.170> know<00:13:47.290> this<00:13:47.440> bond<00:13:47.650> is<00:13:47.800> good<00:13:47.980> Bob 00:13:48.480 --> 00:13:48.490 align:start position:0% know you know this bond is good Bob 00:13:48.490 --> 00:13:50.910 align:start position:0% know you know this bond is good Bob can't<00:13:48.760> dispute<00:13:49.120> it<00:13:49.240> so<00:13:49.780> you<00:13:50.440> can<00:13:50.620> put<00:13:50.800> up 00:13:50.910 --> 00:13:50.920 align:start position:0% can't dispute it so you can put up 00:13:50.920 --> 00:13:53.640 align:start position:0% can't dispute it so you can put up really<00:13:51.310> any<00:13:51.520> amount<00:13:51.820> of<00:13:51.880> money<00:13:52.500> provided<00:13:53.500> that 00:13:53.640 --> 00:13:53.650 align:start position:0% really any amount of money provided that 00:13:53.650 --> 00:13:57.450 align:start position:0% really any amount of money provided that you're<00:13:54.190> computing<00:13:54.610> correctly<00:13:56.070> the<00:13:57.070> bond<00:13:57.280> is 00:13:57.450 --> 00:13:57.460 align:start position:0% you're computing correctly the bond is 00:13:57.460 --> 00:13:59.160 align:start position:0% you're computing correctly the bond is an<00:13:57.580> interesting<00:13:57.850> structure<00:13:58.540> because<00:13:58.900> what<00:13:59.050> it 00:13:59.160 --> 00:13:59.170 align:start position:0% an interesting structure because what it 00:13:59.170 --> 00:14:02.160 align:start position:0% an interesting structure because what it gives<00:13:59.380> you<00:13:59.740> is<00:13:59.920> the<00:14:00.010> ability<00:14:00.340> to<00:14:00.900> account<00:14:01.900> for 00:14:02.160 --> 00:14:02.170 align:start position:0% gives you is the ability to account for 00:14:02.170 --> 00:14:06.030 align:start position:0% gives you is the ability to account for the<00:14:02.620> cost<00:14:02.890> of<00:14:03.160> high<00:14:03.490> computation<00:14:04.350> so<00:14:05.350> what 00:14:06.030 --> 00:14:06.040 align:start position:0% the cost of high computation so what 00:14:06.040 --> 00:14:08.850 align:start position:0% the cost of high computation so what happens<00:14:06.430> is<00:14:06.610> if<00:14:06.940> if<00:14:07.390> the<00:14:07.720> bond<00:14:07.930> is<00:14:08.140> if<00:14:08.260> the 00:14:08.850 --> 00:14:08.860 align:start position:0% happens is if if the bond is if the 00:14:08.860 --> 00:14:11.400 align:start position:0% happens is if if the bond is if the contract<00:14:09.100> is<00:14:09.520> a<00:14:09.550> very<00:14:09.790> costly<00:14:10.290> contract<00:14:11.290> to 00:14:11.400 --> 00:14:11.410 align:start position:0% contract is a very costly contract to 00:14:11.410 --> 00:14:13.830 align:start position:0% contract is a very costly contract to compute<00:14:11.920> you<00:14:12.640> can<00:14:12.820> attach<00:14:13.180> a<00:14:13.390> similarly 00:14:13.830 --> 00:14:13.840 align:start position:0% compute you can attach a similarly 00:14:13.840 --> 00:14:16.950 align:start position:0% compute you can attach a similarly expensive<00:14:14.560> bond<00:14:14.880> but<00:14:15.880> the<00:14:16.240> benefit<00:14:16.720> of<00:14:16.750> this 00:14:16.950 --> 00:14:16.960 align:start position:0% expensive bond but the benefit of this 00:14:16.960 --> 00:14:18.390 align:start position:0% expensive bond but the benefit of this type<00:14:17.170> of<00:14:17.230> construction<00:14:17.830> is<00:14:17.950> you<00:14:18.100> get<00:14:18.280> your 00:14:18.390 --> 00:14:18.400 align:start position:0% type of construction is you get your 00:14:18.400 --> 00:14:20.880 align:start position:0% type of construction is you get your money<00:14:18.610> back<00:14:18.730> so<00:14:19.180> it's<00:14:19.630> sort<00:14:19.840> of<00:14:19.870> like<00:14:19.930> paying 00:14:20.880 --> 00:14:20.890 align:start position:0% money back so it's sort of like paying 00:14:20.890 --> 00:14:23.400 align:start position:0% money back so it's sort of like paying for<00:14:21.310> computation<00:14:22.030> but<00:14:22.660> because<00:14:23.050> you<00:14:23.200> don't 00:14:23.400 --> 00:14:23.410 align:start position:0% for computation but because you don't 00:14:23.410 --> 00:14:26.130 align:start position:0% for computation but because you don't have<00:14:23.680> to<00:14:23.980> actually<00:14:24.550> pay<00:14:24.730> for<00:14:24.760> it<00:14:25.090> because<00:14:25.750> you 00:14:26.130 --> 00:14:26.140 align:start position:0% have to actually pay for it because you 00:14:26.140 --> 00:14:28.050 align:start position:0% have to actually pay for it because you attested<00:14:26.650> to<00:14:26.680> the<00:14:26.770> correct<00:14:27.070> state<00:14:27.340> you<00:14:27.850> get 00:14:28.050 --> 00:14:28.060 align:start position:0% attested to the correct state you get 00:14:28.060 --> 00:14:30.330 align:start position:0% attested to the correct state you get refunded<00:14:28.530> whereas<00:14:29.530> if<00:14:29.740> you<00:14:29.830> attest<00:14:30.100> to<00:14:30.220> an 00:14:30.330 --> 00:14:30.340 align:start position:0% refunded whereas if you attest to an 00:14:30.340 --> 00:14:32.610 align:start position:0% refunded whereas if you attest to an incorrect<00:14:30.670> state<00:14:31.090> you<00:14:31.720> actually<00:14:32.170> have<00:14:32.320> to<00:14:32.470> pay 00:14:32.610 --> 00:14:32.620 align:start position:0% incorrect state you actually have to pay 00:14:32.620 --> 00:14:36.390 align:start position:0% incorrect state you actually have to pay for<00:14:32.680> the<00:14:32.920> computation<00:14:33.250> itself<00:14:35.040> so<00:14:36.040> what<00:14:36.220> we're 00:14:36.390 --> 00:14:36.400 align:start position:0% for the computation itself so what we're 00:14:36.400 --> 00:14:38.460 align:start position:0% for the computation itself so what we're really<00:14:36.430> doing<00:14:36.850> here<00:14:37.000> is<00:14:37.210> were<00:14:37.420> reducing<00:14:38.320> and 00:14:38.460 --> 00:14:38.470 align:start position:0% really doing here is were reducing and 00:14:38.470 --> 00:14:40.160 align:start position:0% really doing here is were reducing and eliminating<00:14:38.560> the<00:14:39.130> need<00:14:39.280> to<00:14:39.340> do<00:14:39.580> full-on<00:14:40.120> chain 00:14:40.160 --> 00:14:40.170 align:start position:0% eliminating the need to do full-on chain 00:14:40.170 --> 00:14:43.470 align:start position:0% eliminating the need to do full-on chain computation<00:14:41.170> and<00:14:41.580> I<00:14:42.580> can<00:14:42.970> have<00:14:43.150> a<00:14:43.180> channel 00:14:43.470 --> 00:14:43.480 align:start position:0% computation and I can have a channel 00:14:43.480 --> 00:14:45.420 align:start position:0% computation and I can have a channel with<00:14:43.720> n<00:14:43.870> participants<00:14:44.500> and<00:14:44.800> be<00:14:44.860> able<00:14:45.070> to<00:14:45.190> can't 00:14:45.420 --> 00:14:45.430 align:start position:0% with n participants and be able to can't 00:14:45.430 --> 00:14:47.730 align:start position:0% with n participants and be able to can't do<00:14:46.090> complex<00:14:46.510> contracts<00:14:47.050> with<00:14:47.200> anyone<00:14:47.530> on<00:14:47.680> the 00:14:47.730 --> 00:14:47.740 align:start position:0% do complex contracts with anyone on the 00:14:47.740 --> 00:14:47.970 align:start position:0% do complex contracts with anyone on the net 00:14:47.970 --> 00:14:47.980 align:start position:0% net 00:14:47.980 --> 00:14:52.920 align:start position:0% net ork<00:14:49.920> likes