Watchtowers monitor the block chain for transactions that may cause one of their users to lose funds. If a theft attempt is detected, the watchtower acts to stop the theft, such as by sending a penalty or recovery transaction on behalf of the affected user.

The idea of watchtowers was introduced for sending LN breach remedy transactions (justice transactions) when a watchtower detected that one of their client’s counterparty had broadcast an outdated channel close transaction. Later, the name was adapted to software that monitors vaults for unvaulting transactions and which will prevent the unvaulting from completing if it violates the user’s policy.

The service provided by watchtowers allows their clients to go offline for significant amounts of time without having to worry about their funds being stolen. Watchtowers are not entrusted with the funds they monitor; their only responsibility is monitoring the block chain and broadcasting transactions. For LN, breach remedy transactions can be designed so that the watchtower receives a portion of the safeguarded funds if their services are needed.

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