Point Time-Locked Contract (PTLC)
A Lightning Network payment construction, built on adaptor signatures, that achieves the same conditional payment guarantee as an HTLC with better privacy and efficiency.
A Point Time-Locked Contract achieves the same fundamental goal as a Hashed Timelock Contract (see Kaavon's "Hashed Timelock Contract (HTLC)" glossary definition) — conditionally locking a payment so it's only claimable by revealing specific secret information before a deadline — but builds this using an adaptor signature (see Kaavon's "Adaptor Signature" glossary definition) rather than a hash-based script condition. The "point" in the name refers to the elliptic curve point used as the linking secret, replacing the hash preimage an HTLC relies on.
PTLCs offer two meaningful advantages over traditional HTLCs: they're more private, since different PTLCs along a multi-hop Lightning payment route don't share any identifiably linked value the way HTLCs using the same hash preimage across hops do, which previously made it easier to correlate payments across a route; and they're more compact and cheaper, since they avoid the extra on-chain script data an HTLC's hash-and-timelock condition requires. PTLCs require Schnorr signature support to function, which is why their adoption became practical only after Taproot's activation.
Examples
- A Lightning payment routed using PTLCs is harder to correlate across its multiple hops than the same payment routed using traditional HTLCs, since PTLCs don't share an identifiable linking value across hops.
- PTLCs became practically usable on the Lightning Network only after Taproot activated, since the construction depends on Schnorr signature support.