Bitcoin seems to have grabbed the attention of the investors as it soared as high as $19K in late 2017. However, it is still not technically adept to be used for day-to-day activities including spending. As Bitcoin is the first generation of blockchain cryptocurrency, it is not perfect, and that’s where the lightning network comes in.
The lightning network is a solution that aims to scale the Bitcoin network and provide better transaction capability to its network. This leads us to our first question.
What’s the need for the lightning network?
The blockchain used by bitcoin is slow when compared to the newer generation of blockchains such as Ethereum or EOS. Right now, Bitcoin only offers 7tps which is extremely low compared to the global standard Visa transactions that can carry 24,000tps. That’s a huge difference which makes it infeasible as a transaction currency.
The most basic part of a blockchain is the blocks. For a transaction to be completed, it first needs to be verified by the miners and then engraved within the block. This makes each transaction too slow. On top of that, we have huge transaction fees associated with it.
The lightning network aims to solve all of this by providing a scalable network that is built on top of the blockchain. It is an off-chain network which means that it will handle the bulk of the load and will work in conjunction with bitcoin blockchain network.
Current things happening with lightning network
The lightning network is in rapid development over the past few years. Right now, it is out for testing purposes and more than 300 merchants have gained access to it. The person looking behind all of this is Elizabeth Stark. She serves as the CEO of the lightning network.
She also thinks that the use of smart contracts in the lightning network will ensure proper automation without the need for human intervention.
The two main components of the lightning network include Neutrino and the Lightning Network Daemon. Both of them are in active development. The Lightning Network Daemon is the lightning network implementation that handles all the different aspects of the network including mobile phone support, privacy and Neutrino. Neutrino is a client that is privacy-focused and easy-to-use for the end user.
However, not everything seems to be in green for the lightning network. They are currently struggling to get nodes active for the network to work efficiently. The challenges include incentivizing people to join the network and power it.There is one more thing that keeps the lightning network right on track. It is the BOLTs specification which is released to ensure the different teams working on the lightning network don’t create their separate version. The specification will ensure that the end result is an interoperable lightning network.
Lightning network looks promising. Also, it can lead to positive sentiment in the market considering Bitcoin’s the most popular cryptocurrency out there. So, what do you think about the lightning network? Comment below and let us know.