The need for the lightning network was there from the beginning. Bitcoin is the first generation blockchain solution which does solve the decentralization problem but is not perfect. Ten years ago, Satoshi Nakamoto released his white paper on Bitcoin. At that time, it didn’t get much attention, but slowly it picked up the attention it required.
The biggest problem with bitcoin is the scaling problem. It fails to scale when the network becomes large, clogging payments and transactions. The lightning network is what we call the solution for the Bitcoin’s scaling problem. The lightning network is not new, and it has been in development for quite some time.
In today’s article, we will be discussing the current things that are going on with the lightning network and what it has to offer to the community.
The need for Lightning network
Before we dive deep into the discussion, first, we need to establish the need for it. Blockchains are slow, especially, if they are first or second generation solutions. Blocks are the fundamental core of a blockchain. It contains transactions, and once a block is completed and verified, it is attached to the blockchain. Now, the issue arises when we consider the time needed for these blocks to be mined and attached to the blockchain. It can take up to 10 minutes for the process to take place (which is considerably slow compared to other transaction methods). On top of that, there is a transaction fee.
To solve all the above issues and make the network more scalable and fast, we need the lightning network. Still confused? We recommend reading a proper explanation on Lightning network and its needs by going through this article here: Lightning Network explained.
What’s going on in the world of the lightning network?
Elizabeth Stark, the CEO of the Lightning Labs has been working continuously on the lightning network. According to her, they are moving at a rapid pace and would soon see proper lightning network implementation in the real world. The first thing that came into existence is the smart contract dispute resolution which ensures that there is no dispute in the network. It works similar to a decentralized network and depends heavily on smart contracts that are pre-signed.
Meet Lightning Network Daemon, the lightning network implementation that is currently in works. At the time of writing, it is at version 0.5 and is currently being deployed in testnet3 – the test network for Bitcoin. It is in the beta phase which means that it has been live for the mainnet as well. Many people have already used the lightning network and have purchased things using it. The 0.5 release also includes neutrino, mobile phone support, privacy support and much more!
Neutrino is privacy-focused Bitcoin client which is lightweight and easy to use.
The real challenge for the lightning network is to build a network of nodes that support lightning operations. The testing done in Feb 2018, saw proper engagement from the users. The network map was growing, and people were contributing to the product. In Jan 2018, the test net only saw 46 lightning network channels. However, the number snowballed by September 2018 to 12,000 channels as more and more people joined it.
Andreas Brekken, the owner of shitcoin.com, has always been keen on the development of lightning network and he participated heavily in developing the test network for it. During his testing, he put on 45 BTC into the network.
As the whole process of lightning network development is open source, many teams across the world are working towards it. BOLTs specifications are released by the team to ensure that there is one lightning network. These specifications will guide all the teams to work towards a unified lightning network that integrated the three major implementations until now. The focus is to create an interoperable lightning network.
Merchant Use Cases
The success of lightning network depends on how easily merchants can use it. The CEO of Lightning Labs, Elizabeth Stark, however, was happy to announce in the Baltic Honey Badger 2018 Bitcoin conference that they now have a high-performance merchant platform. One example includes BitRefill which is using the lightning network to enable people to buy real things. She also added that they are in talks with Airbnb and things can change fast. Regarding payment processing, there is BTCPay and Cyphernode. Other examples include GloBee.
The future of lightning network looks promising. With LND 0.5 release, anyone can use the lightning network in the real world. Right now, Neutrino is only limited for test net. The aim is to offer a secure solution that can help improve Bitcoin viability in the real world. So, what do you think about the lightning network? Will it get officially released by the end of 2018?