CBP CBP Lightning Network and Layer 2 Solutions 2

Question 1

What does 'inbound liquidity' mean in the Lightning Network?

Accepted Answer

The capacity available to receive payments through a channel

Answer

The amount of Bitcoin a node has mined

Answer

The number of nodes connected to a routing hub

Answer

The transaction fee set by a node

Question 2

Which type of Lightning Network node gives users full control of their private keys?

Accepted Answer

Self-hosted non-custodial nodes

Answer

Exchange-hosted custodial nodes

Answer

Custodial wallet nodes

Answer

Mining pool nodes

Question 3

What is a 'watchtower' in the context of the Lightning Network?

Accepted Answer

A third-party service monitoring channels for fraudulent closing attempts

Answer

A server monitoring Bitcoin prices

Answer

A blockchain explorer service

Answer

A node that validates new Bitcoin blocks

Question 4

What penalty mechanism deters cheating in Lightning Network channel closures?

Accepted Answer

The honest party can claim all channel funds if the other broadcasts an old state

Answer

A fine paid to the Bitcoin Foundation

Answer

The cheating party's node is banned from the network

Answer

Miners blacklist the cheater's address

Question 5

What use case does the Lightning Network enable that is impractical on-chain?

Accepted Answer

Micropayments of fractions of a cent

Answer

Large institutional Bitcoin transfers

Answer

Multi-signature cold storage

Answer

Miner block rewards

Question 6

What is a 'submarine swap' in the Lightning Network?

Accepted Answer

An atomic swap between on-chain Bitcoin and Lightning Network Bitcoin

Answer

A physical exchange of Bitcoin at sea

Answer

A method to anonymize Bitcoin transactions

Answer

A protocol for mining in underwater data centers