Non-Simulated Shared Ownership of bitcoin with Multi Signatures in the Lightning Network
The universal axiom of scarcity is defined as the potential of conflict of control over a good. Either Alice, or Bob can hold and use a gold coin, there is no possibility that both at the same time have full deposal over it. Because of this fundamental scarcity, property rights emerge as a sound and logical structure to allocate resources throughout time. There are however non-scarce goods which are not restricted to individual control and use. Like ideas, music or speech, these libre goods can be shared with whomever without the need of sacrifice by the initial creator. The poet still knows his poem after he has performed it on stage, yet the audience has gained the knowledge conveyed. Thus there is no need for property rights and ownership in the realm of ideas and mind.
In Bitcoin, a unspent transaction output can only be spent when a previously committed script is computed as valid. Although the Bitcoin script is not Turing complete, it is exhaustive with several OP codes which can be constructed into smart contracts. The most basic script is a pay to single public key hash, where the proof of knowledge of one private key with a cryptographic signature returns valid and thus enables the transfer of bitcoin to another commitment script. Only with the knowledge of a non-scarce piece of information, can the property rights of a scarce bitcoin be proven and enforced. One of the most commonly used OP codes is CHECKMULTISIG, where a coin can only be spent with m-of-n valid signatures. This allows for non-simulated shared ownership of libre sound money, which is a groundbreaking innovation with vast consequences.
This thesis explains the universal divide between scarce and non-scarce goods; the emergence and importance of private property and the the public commons; the novel invention of non-simulated shared ownership of bitcoin; the basics of Bitcoin script; how multi sig is used on the first layer block chain; and the basics of lightning network and it's use of multi sig. The novel research of this thesis is to suggests how different types of multi sig payment channel can be constructed, updated and closed; how multi sig access rights to a lightning node might work; and estimates weather such a multi sig payment channel is useful for liquidity routing. Concluding with different use cases and business models possible with lightning multi sig.
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