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by BitcoinIsCash 2849 days ago
The Lightning Network is not settlement. It's like an IOU, that depends on the eventually-settled state of all associated channels.
1 comments

It's not like an IOU. They are literally signed (by both parties of the channel) transactions that have yet to be broadcasted and included into blocks. You aren't sending something that is worthless to the counterparty. You both agree what the channel balance is. If there is a disagreement to the state of the channel, the base layer is the ultimate arbiter.

It's a smart contract between two parties.