In response to a statement over on LTCMarkets.
As far as I know, they are bidirectional state Channels
Correct. The funds in a LN channel are owned by the originators of the channel but approved by both parties. Movement of funds (a portion, or the total allocation) in either direction (to addresses outside of the LN channel) are guaranteed once the signatory of both parties signs off on it.
So the key part is that the owner of any allocated funds to the channel is the originator of funds (either side can allocate funds) and that either party can choose to close the channel without approval of the second signatory in which case the funds cease to be part of a lightning channel and revert to the originators. And naturally a channel can be setup where only one side allocates funds.
Probably the biggest benefit I see here is that it opens up not only immediate settlement for all sorts of financial vehicles (securitizations on banking products), but also things like Wills and Trusts, where allocation is made and a fund movement is time based or is requested in reverse by the second signatory that unless a 'refusal/denial' is put in place within a set period of time (predetermined on channel creation) the funds pass directly to the second signatory.
So how does that work?
Person A (Originator) sets up channel with Person B
Person A declares the amount, and a future timestamp (or indefinite in the case of a will) for funds to transition.
Person A also declares a period of time needed before funds transfer in the event that Person A is unable to sign and Person B requests funds.
Person A dies .. (awww cry cry)
Person B sends request for transfer triggering a potential future transfer.
Person B waits for either Person A to deny a funds transfer or the predetermined time set by Person A at which time the funds transfer.
There you have Wills and Trusts. Just an example of basic contractual fund settlement. And there's no reason the channels can't be multi-multi signatory, tiered, phased, etc.
Which at this stage of BTC/LTC etc is actually extremely important. People die, people have dependents, people form relationships, get married, and unless there's an easy way to transition funds in the event of some sort of catastrophe (that doesn't involved sharing private keys) there's going to be real world problems stemming from it.
Anyway -- yes smart contracts are well established in Ethereum but I was actually a little surprised that we'd see that move to Bitcoin/Litecoin. And now that it's basically here, it's very exciting.