Jack, a young entrepreneur in Chicago, wants to open a payment channel with Birdie, who runs a social media app, to pay for services and possibly tip content creators. Jack owns a single UTXO for 0.01 BTC and would like to fund the channel with 200,000 sat (recall 1 BTC= 108 sat).

a) Describe the characteristics of the channels funding transaction, including inputs/outputs/amounts/content of locking scripts. Assume the blockchain fee is currently 30,000 sat. (10 marks)

b) Briefly list the essential security measures to ensure that Jack and Birdie are both protected from fraud and unfair losses as partners in the payment channel. Include one example of the type of risk that that it protects against. (10 marks)