In this article, you will learn what is lightning network. Bitcoin network has drawbacks like slow transactions and high fees. Developers have tried to fix this and lightning network is one of the solutions.
What is Lighting Network?
The Lightning Network is a secondary layer on the Bitcoin blockchain which allows users to create payment channels where transactions can occur away from the main blockchain, but still benefit from the blockchain's security and decentralization. These are known as off-chain transactions. The layer second offers speed, cost savings and scalability for the entire Bitcoin network.
What are the Benefits of Lightning Network?
- Instantaneous Transactions
Currently bitcoin blockchain transactions take about an average of 10 minutes to confirm since that is the time every new block gets added to the blockchain by the miners. Depending on the fees, the confirmation time on average can range between 10 mins - 2 hours.
Through Lightning Network the transactions would confirm in a matter of seconds making them almost instantaneous.
-Low Fees
The bitcoin blockchain fee varies according to the market but usually lies in the range of $0.2 — $4 to get the transaction confirmed in the next block. This is not always the case, as we saw during the December 2017 price rally where the fees reached as high as $38. As adoption increases so does the load on the blocks and the fees usually goes up.
With Lightning Network the fees range between 1–10 satoshi ($0.00008 — $0.0008) making them ideal for quick daily transactions.
- Less congestion on Bitcoin Network
Since the Lightning Network runs on 'second layer' without interacting with the main bitcoin blockchain, the bitcoin network would remain less congested making it more scalable for adoption.
-Cross-chain Atomic Swaps
Atomic Swaps links payment channels across different blockchains (cross-chain) allowing users to 'swap' their cryptocurrency into another without using third-party custodian services.
Cross-chain atomic swaps can occur in Lightning Network off-chain as long as both chains share the same cryptographic hash function. The transactions are 100% trustless, instant with negligible fees.
-Security First
The team behind Lightning Network takes security very seriously. There are protocols within the Lightning Network that are deployed to make sure payments are secure and not vulnerable to attacks.
Lighting Network uses Onion Routing to safely route HTLC's (Hash-Time-Locked-Contracts, basically a conditional payment) within the network. Similar technology is used by Tor.
- Active Development
Developments within Lightning Network are very active. New features and upgrades to the software happen regularly and the team is committed to make Lightning Network into a secure, stable solution to scale bitcoin.
- User friendly Design
The Lightning Network User Interface is designed to provide a seamless user experience. Lightning Network may sound complicated if you deep-dive into the underlying technology and how it works but to an average user who wants to simply send transactions such information is not really of interest as long as they can send transactions easily and securely.
Bottom Line
Lightning Network is a very exciting and promising addition to bitcoin. Its active development and a strong team behind it makes for a strong case for its bright future. So, if you are interested in lightning networks, this is about what is lightning network.
