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If I understands correctly, A and B will exchange their revocation key once they are ready to move to the next state. What happens if B received the revocation key and decided to close the channel unilaterally without broadcasting the transaction. This way B can never get his funds, but A can never get his funds as well. Because A can not broadcast his transaction since B has his revocation key. Isn't it a huge risk for A?
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What happens if B received the revocation key and decided to close the channel unilaterally without broadcasting the transaction
By definition, channels are only closed once a commitment transaction or the closing transaction is broadcast. So B cannot close the channel; he simply withholds data from A.
Your scenario is not possible because A will only give B the revocation key once both B has given A his new commitment transaction. So if B refuses to give A the revocation key to his commitment transaction, then A can close the channel by broadcast the previous commitment transaction which has not yet been revoked.
Thanks! Wouldn't it be unfair for B if A gets the new commitment, so he can broadcast both the old commitment and the new commitment? (especially in the case when the old commitment favors A). – Helin Wang – 2018-03-22T05:09:28.353
1The protocol is actually a bit more nuanced. A first sends B B's new commitment. When B accepts it, he has to send both the revocation key and A's new commitment before A sends B his revocation key. So if B refuses to send A the revocation key, A can close the channel unilaterally using the previous commitment which has not yet been revoked. I revised my answer slightly. – Andrew Chow – 2018-03-22T05:19:25.770
I suggest that you read this section of the lightning rfs: https://github.com/lightningnetwork/lightning-rfc/blob/master/02-peer-protocol.md#normal-operation
– Andrew Chow – 2018-03-22T05:20:37.717