1) Alice sends

2) Alice signs and sends

3) Bob signs and sends

4) Bob signs and sends

5) Alice broadcasts

Normal P2PKH, no need for sending beforehand

Hashed Timelock Contract (HTLC)

• Output of a Commitment transaction (Ctx)

• Pays to Bob if he knows the preimage of a hash

• Pays to Alice only after some block height

• Hash and height specified in Ctx

• Spendable relative to Ctx signing

• Used for multi-hop payment channel

0) Dave generates R and sends hash(R) to Alice

4) Dave discloses R and gets paid from Carol

Carol will either:

• Learn R before the 2-day lock expires and get paid from Bob (step 5), or
• Never learn R and get her money back from Dave after the 1-day lock expires (step 4)