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In a series of tweets, the creator of Litecoin, Charlie Lee, explains why he believes that Bitcoin, along with Lightning Network (LN), represents the original concept of Bitcoin expressed in Satoshi's white paper. Although LN did not exist when Bitcoin was launched in 2009, the Lightning network, according to Lee, can make Bitcoin work as expected: as a fully decentralized peer-to-peer payment network.
Technically, LN is a "second-level" payment protocol that operates on the top of a blockchain, regulating off-line transactions. Not worrying about the time it takes to confirm the blocks on the chain, it effectively blocks blockchain bottlenecks created by miners, speeding blockchain confirmations by processing transactions at an instant.
The development team also says it is "capable of trillions of transactions per second across the network" allowing it to wipe out "legacy payment tracks of many orders of magnitude."
lee writes,
"Bitcoin and Litecoin chain payments are not peer-to-peer payments are sent by the sender to the miners, who register it on a distributed ledger.The recipient receives the payment when it is registered.But, this is facilitated by a p2p network in which transactions are transmitted.
The transmission network is p2p, but payments in the strict sense are not p2p. The sender can ignore the p2p network and directly communicate the transaction to the miners to send the payments. The sender must not have any communication with the recipient in any way p2p!
This is actually a good thing as the recipient does not have to be online to receive payments. Ironically, chain payments are more like a hub and spoke model where data mining pools are hubs, and users simply need to connect to those hubs to send payments.
Payments from the Lightning network, on the other hand, are p2p payments. Sometimes p2p are direct, sometimes indirect p2p. LN payments must be sent from the peer to peer to switch from the sender to the recipient. Both must be online, just like other P2P networks like BitTorrent.
Because LN payments are peer-to-peer, they can work if the peers involved are disconnected from the rest of the Internet. The sender can also send payments directly to the recipient simply by having a direct connection without relying on anyone else.
Bitcoin with Lightning Network fits more closely with the title of the Bitcoin white paper: "A peer-to-peer electronic payment system". This is Satoshi's vision.
PS. The first Bitcoin customers had a function of sending to IP (in addition to sending to the address) that allows you to make p2p payments. This has been removed on subsequent clients. LN actually reports p2p payments to Bitcoin, making it more scalable, more flexible, more private and cheaper! "
Joseph Poon and Thaddeus Dryja published the white paper "The Bitcoin Lightning Network: Scalable Off-Chain Instant Payments" in 2016.
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Disclaimer: the opinions expressed in The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin or cryptocurrency. Your transfers and exchanges are at your risk. Any losses you could sustain are your responsibility. Please note that The Daily Hodl participates in affiliate marketing.
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