Lightning Network (LN) is probably one of the most anticipated innovations for the Bitcoin blockchain. The idea that two years ago suggested that developers Joseph POON and Taj Dria will solve the scalability issues of bitcoin and greatly accelerate the process of transaction. On the implementation of LN-Protocol operate several companies, including Blockstream, ACINQ, Lightning Labs, MIT DCI and Bitfury.
What is Lightning Network?
The LN technology is an add-on for Bitcoin blockchain. It will give users the ability to conduct an unlimited number of micropayments, which are not recorded in the blockchain — there misses information on the interim payments, only a final balance.
Along with this, in LN there is virtually no possibility of theft or loss of money, as well as any manipulations. The user sends the funds together with contingent on the return. Funds are frozen as long as the receiving party does not sign the obligation about return. If the other party does not fulfill the terms of the agreement, the funds will go back to the sender.
In addition, LN may be an alternative to increase the block in the Bitcoin blockchain. If the add-in is implemented, the low throughput of the unit will no longer be a problem, because most of the operations will be carried out in LN, without loading the blockchain.
Where Lightning Network will find application?
Thus, using the LN, it will be possible to pay for small purchases — from a Cup of coffee to furniture. Now this is disadvantageous because due to the low bandwidth of the block in the Bitcoin network, the users have to pay a high enough Commission. So it makes no sense to send each other a small amount.
In addition to the ability to widely introduce the payment of bitcoin, LN will facilitate the exchange of cryptocurrencies. Now to exchange bitcoin for litecoin you have to either operate through a cryptocurrency exchange, or to look for a person you can trust. But with the ENG you can exclude the third party.
The technology that is going to use LN for the exchange of cryptocurrency, called atomic swaps. With this decision, the participants with coins in different blockchains will be able to trade instantly and directly, without risking anything.
What is atomic swaps and how they are tested?
The term “atomic” means that the transaction will either be complete or not held at all. That is, if the network node LN goes offline or one of the participants refuses to deal, both sides will get their money back.
To atomically swaps worked all the blockchains, they need to build on the LN. Atomic transactions were tested within four blockchains Litecoin, Decred, Vertcoin and Bitcoin. The Creator of Litecoin, Charlie Lee has conducted several operations — September 19, Decred and between Litecoin and 21 September between Litecoin and Vertcoin.
A week ago he had an atomic operation between Litecoin and Bitcoin are already in LN, and told about it in Twitter.
“Now that SegWit2x cancelled, and the haters SegWit a private coin for games, this means that now we begin to act quickly and decisively to the scale of Bitcoin/Litecoin using LN and other solutions of the scaling of the second level”, commented Lee.
It is planned that, as in the case of bloccano Bitcoin, LN will simplify and speed up the technology of atomic swaps. In the future, this will pave the way for the exchange of coins between different blockchains without intermediaries, bypassing the exchanges and regulators.