Think in terms of participants, not addresses. A participant in the lightning network has a couple of connections to various hubs, from which the participant is able to send or receive coin. The user is able to send coins to anyone connected to the lightning network by means of an atomic transaction through any path of the network. But the only payment from them that ever hits the chain is their settlement with the hub.

Imagine there was a TCP/IP data chain and corresponding lightning network. Everyone connected to the network has an "IP" channel with their ISP. Through this channel they can send data to anywhere on the network, and a traceroute shows what hops the data would take. But when settlement actually occurs all the network sees is the net amount of data that has gone through each segment -- without any context. There's no record preserved on-chain of who sent data to whom, just that X bytes went through the pipe on the way to somewhere unspecified.

So it is with lightning payment networks. You open a channel with a hub and through that channel send coins to anyone accessible to the network. Channels only close when a participant needs the funds for non-lightning reasons, or when hubs need to rebalance. And when they do, observers on the chain learn nothing more than how much net coin moved across that single link. They learn nothing about where that coin eventually ended up.

So back to your original question, each channel can be considered to have a pseudonymous identity, and each new channel given a new identity. Channel closures can even be coinjoin'd when the other party is cooperating. But ultimately, lightning usefully solves a problem where participants have semi-long lived payment endpoints.

On Sun, Jun 28, 2015 at 9:32 AM, Raystonn . <raystonn@hotmail.com> wrote:

Write coalescing works fine when you have multiple writes headed to the same (contiguous) location.  Will lightning be useful when we have more unique transactions being sent to different addresses, and not just multiple transactions between the same sender and address?  I have doubts.


-----Original Message----- From: Adam Back
Sent: Sunday, June 28, 2015 5:37 AM
To: Benjamin
Cc: bitcoin-dev@lists.linuxfoundation.org
Subject: Re: [bitcoin-dev] A Proposed Compromise to the Block Size Limit

On 28 June 2015 at 12:29, Benjamin <benjamin.l.cordes@gmail.com> wrote:

I agree that naive scaling will likely lead to bad outcomes. They might have
the advantage though, as this would mean not changing Bitcoin.

Sure we can work incrementally and carefully, and this is exactly what
Bitcoin has been doing, and *must* do for safety and security for the
last 5 years!
That doesnt mean that useful serious improvements have not been made.

Level2 and Lightning is not well defined. If you move money to a third
party, even if it is within the constrained of a locked contract, then I
don't think that will solve the issues.

I think you misunderstand how lightning works.  Every lightning
transaction *is* a valid bitcoin transaction that could be posted to
the Bitcoin network to reclaim funds if a hub went permanently
offline.  It is just that while the hubs involved remain in service,
there is no need to do so.  This is why it has been described as a
(write coalescing) write cache layer for Bitcoin.>

I believe people expect lightning to be peer 2 peer like bitcoin.

Adam
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