.. DO NOT EDIT.
.. THIS FILE WAS AUTOMATICALLY GENERATED BY SPHINX-GALLERY.
.. TO MAKE CHANGES, EDIT THE SOURCE PYTHON FILE:
.. "api/gallery/channels/payment_channels/plot_05_eltoo.py"
.. LINE NUMBERS ARE GIVEN BELOW.

.. only:: html

    .. note::
        :class: sphx-glr-download-link-note

        :ref:`Go to the end <sphx_glr_download_api_gallery_channels_payment_channels_plot_05_eltoo.py>`
        to download the full example code or to run this example in your browser via JupyterLite.

.. rst-class:: sphx-glr-example-title

.. _sphx_glr_api_gallery_channels_payment_channels_plot_05_eltoo.py:


eltoo: channel updates without penalties (Decker, Russell and Osuntokun, 2018)
==============================================================================

Lightning's penalty punishes mistakes as hard as theft: restore an old
backup, publish it, and lose the channel. eltoo replaces punishment with
replacement. Every state is an *update* transaction, which can spend the
funding output or any earlier update, and a *settlement*, which pays that
state's balances after a delay. An old update on chain is simply
overwritten by a newer one, and only the last update ever settles.

Updates can attach to any earlier update because they are signed with
``SIGHASH_NOINPUT``, which leaves the spent output out of the signature;
and only *later* updates can attach, because each update output demands a
lock time above its own state number:

.. math::

   \text{update } m \text{ spends update } n \iff m \ge n + 1.

.. GENERATED FROM PYTHON SOURCE LINES 23-27

.. code-block:: Python

    import matplotlib.pyplot as plt

    import blockchainkit as bk








.. GENERATED FROM PYTHON SOURCE LINES 28-30

Twelve updates, and a stale publication
---------------------------------------

.. GENERATED FROM PYTHON SOURCE LINES 30-45

.. code-block:: Python


    channel = bk.channels.EltooChannel(("alice", "bob"), (7, 5), (100, 100), delay=144)
    for state in range(12):
        channel.pay("alice" if state % 3 else "bob", 10)
    print("latest balances:", channel.balances)

    channel.publish(state=4, height=1_000)  # Alice publishes an old state...
    try:
        channel.publish(state=2, height=1_001)  # ...and cannot go further back.
    except ValueError as error:
        print("state 2 rejected:", error)
    channel.publish(height=1_002)  # Bob overwrites it with the latest.
    settlement = channel.settle(height=1_002 + 144)
    assert dict(settlement.payouts) == channel.balances and settlement.state == 12





.. rst-class:: sphx-glr-script-out

 .. code-block:: none

    latest balances: {'alice': 60, 'bob': 140}
    state 2 rejected: update 2 cannot replace the one on chain: OP_CHECKLOCKTIMEVERIFY: the lock time has not been reached




.. GENERATED FROM PYTHON SOURCE LINES 46-50

The cost of publishing an old state, by mistake or on purpose
-------------------------------------------------------------
Compare Lightning, where a watching counterparty takes everything, with
eltoo, where the stale state is replaced and costs nothing but fees.

.. GENERATED FROM PYTHON SOURCE LINES 50-67

.. code-block:: Python


    lightning = bk.channels.LightningChannel(("alice", "bob"), (7, 5), (100, 100), delay=144)
    for state in range(12):
        lightning.pay("alice" if state % 3 else "bob", 10)
    honest = lightning.balances["alice"]
    lightning.publish("alice", state=4, height=1_000)
    lost = honest - lightning.penalize(height=1_001).payouts["alice"]
    print(f"stale state 4: Alice loses {lost} in Lightning, 0 in eltoo")
    assert lost == honest

    fig, ax = plt.subplots(figsize=(7, 4))
    ax.bar(["Lightning", "eltoo"], [lost, 0], color=["#dc2626", "#16a34a"])
    ax.set(ylabel="coins Alice loses", title="Publishing an old state: penalty or replacement")
    fig.tight_layout()

    plt.show()




.. image-sg:: /api/gallery/channels/payment_channels/images/sphx_glr_plot_05_eltoo_001.png
   :alt: Publishing an old state: penalty or replacement
   :srcset: /api/gallery/channels/payment_channels/images/sphx_glr_plot_05_eltoo_001.png
   :class: sphx-glr-single-img


.. rst-class:: sphx-glr-script-out

 .. code-block:: none

    stale state 4: Alice loses 60 in Lightning, 0 in eltoo




.. GENERATED FROM PYTHON SOURCE LINES 68-73

Exercise
--------
In eltoo each party keeps only the latest update and settlement. What must
a Lightning party keep to be able to punish every revoked state, and how
does the hash chain of per-commitment secrets keep that small?


.. rst-class:: sphx-glr-timing

   **Total running time of the script:** (0 minutes 0.884 seconds)


.. _sphx_glr_download_api_gallery_channels_payment_channels_plot_05_eltoo.py:

.. only:: html

  .. container:: sphx-glr-footer sphx-glr-footer-example

    .. container:: lite-badge

      .. image:: images/jupyterlite_badge_logo.svg
        :target: ../../../../lite/lab/index.html?path=api/gallery/channels/payment_channels/plot_05_eltoo.ipynb
        :alt: Launch JupyterLite
        :width: 150 px

    .. container:: sphx-glr-download sphx-glr-download-jupyter

      :download:`Download Jupyter notebook: plot_05_eltoo.ipynb <plot_05_eltoo.ipynb>`

    .. container:: sphx-glr-download sphx-glr-download-python

      :download:`Download Python source code: plot_05_eltoo.py <plot_05_eltoo.py>`

    .. container:: sphx-glr-download sphx-glr-download-zip

      :download:`Download zipped: plot_05_eltoo.zip <plot_05_eltoo.zip>`


.. only:: html

 .. rst-class:: sphx-glr-signature

    `Gallery generated by Sphinx-Gallery <https://sphinx-gallery.github.io>`_