Emulating OP_RAND

The challenges of managing high volumes of hashed public keys and zero-knowledge proofs (zkps) for every update in the context of Hashed Time-Locked Contracts (HTLCs) present significant hurdles, particularly due to the prohibitive resource demands such tasks entail. This complexity is underscored by the consideration that while computational, transmission, and verification processes might be optimized to utilize otherwise idle CPU and bandwidth resources, the investment required in terms of Lightning Network (LN) developer time may not justify the development of a sub-protocol focused exclusively on small-value transactions.

Despite these concerns, the potential applications of probabilistic HTLCs extend beyond the realm of minor value transfers. In scenarios where channel partners within a channel factory, exemplified by Alice and Bob, confront exorbitant transaction fees that dwarf the intended transaction value—a $100 HTLC facing $1,000 in fees—the appeal of probabilistic HTLCs becomes apparent. These mechanisms offer a means to mitigate risk, essentially reducing the average expected loss to zero, in contrast to traditional or trimmed HTLC approaches which impose a tangible risk of substantial loss ($100) on the participants.

Nonetheless, adopting probabilistic HTLCs introduces its own set of complications. For instance, to economically justify on-chain settlement of a $100 payment against a backdrop of $1,000 transaction fees, a party may need to allocate an impractically large capital reserve, potentially upwards of $10,000, for the duration of the HTLC. This issue, however, could potentially be addressed within channels involving more than two parties, specifically through the engagement of one party as a speculator willing to bear the associated risks. The solution, while theoretically feasible, remains largely unexplored and highlights the intricate balance between innovation and practicality in the evolution of LN protocols. For further insights into the discussion surrounding scalable protocols for resolving lightning payments, consider delving into resources such as OPR, which offers a comprehensive overview of related technological advancements and conceptual frameworks.