The layers of Bitcoin. Lightning Network as a hybrid second layer mechanism with proof-of-stake elements to route transactions over Bitcoin. This is part (Q&A-2) of a talk which took place on October 19th 2016 at the Bitcoin Wednesday Meetup in Amsterdam, Netherlands
Transcript
[AUDIENCE] Andreas, you once made a point about the layering of Bitcoin, with the Lightning Network on top. I think you [also] made a point of saying that [the Lightning Network] was a hybrid model, representing a proof-of-stake aspect. Is that an argument you would make? [ANDREAS] Yes, I think that Lightning does incorporate some elements of proof-of-stake.
In order to create Lightning as an overlay network that allows you to route payments over Bitcoin, very fast and in very small amounts, you need to build channels that will "lock up" money. If you engage in the Lightning Network, effectively you can earn fees for routing. Locking up money to earn fees sounds like proof-of-stake to me. It introduces a kind of hybrid mechanism for committing funds to the system, which supports the network, and earning some reward in return for that, by securing transactions.
I would call that a proof-of-stake system.