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@ -307,7 +307,7 @@ Each subsequent commitment transaction must have a shorter timelock so that it m
State channels use timelocks to enforce smart contracts across a time dimension. In this example we saw how the time dimension guarantees that the most recent commitment transaction becomes valid before any earlier commitments. Thus, the most recent commitment transaction can be transmitted, spending the inputs and invalidating prior commitment transactions. The enforcement of smart contracts with absolute timelocks protects against cheating by one of the parties. This implementation needs nothing more than absolute transaction-level timelocks (+nLocktime+). Next, we will see how script-level timelocks, +CHECKLOCKTIMEVERIFY+ and +CHECKSEQUENCEVERIFY+, can be used to construct more flexible, useful, and sophisticated state channels.
The first form of unidirectional payment channel was demonstrated as a prototype video streaming application in 2015 by an Argentinian team of developers. You can still see it at streamium.io.
The first form of unidirectional payment channel was demonstrated as a prototype video streaming application in 2015 by an Argentinian team of developers. You can still see it at pass:[<a href="https://streamium.io/" class="orm:hideurl"><em>streamium.io</em></a>].
Timelocks are not the only way to invalidate prior commitment transactions. In the next sections we will see how a revocation key can be used to achieve the same result. Timelocks are effective but they have two distinct disadvantages. By establishing a maximum timelock when the channel is first opened, they limit the lifetime of the channel. Worse, they force channel implementations to strike a balance between allowing long-lived channels and forcing one of the participants to wait a very long time for a refund in case of premature closure. For example, if you allow the channel to remain open for 30 days, by setting the refund timelock to 30 days, if one of the parties disappears immediately the other party must wait 30 days for a refund. The more distant the endpoint, the more distant the refund.