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It is no secret that Bitcoin suffers from slow and expensive transactions. In December 2017, an average transaction fee exceeded $ 30 and a confirmation procedure took about 30 minutes! Now the numbers are much lower, but scalability remains the biggest problem Bitcoin has yet to solve.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Many cryptic enthusiasts believe that the Lightning network will bring new solutions that will affect many currencies: it is a non-chain technology that can significantly reduce both the speed and the price of BTC transactions. some argue that it will not be Bitcoin but Litecoin benefits more from its launch. In addition to fast and cheap transactions, the technology introduces so-called "atomic swaps" that allow cross-chain cryptocurrency exchange. As Bitcoin and Litecoin are among the first to use the LN upgrade, the level of interoperability between the two currencies will increase. In other words, with the implementation of the Lightning Network, the number of ways to exchange Litecoin for Bitcoin and vice versa will increase. Let's say that if a BTC holder wants to use a cheaper LTC for daily micropayments, it is not necessary to buy a cryptographic exchange to buy Litecoin first; they can simply perform an atomic exchange between two blockchains. It sounds catchy, is not it? Let's go deeper into how the Lightning network works and how the power balance in the cryptographic market will change. "Data-reactid =" 23 "> Many enthusiasts of cryptography believe that the Lightning network will bring new solutions that will influence a lot of currencies: it is a technology out of the chain, which can significantly reduce both the speed and the price of BTC transactions, but some argue that it will not be Bitcoin but Litecoin to take full advantage of its launch, the technology introduces so-called "atomic swaps" that allow cross-chain cryptocurrency exchange, as Bitcoin and Litecoin are among the first to use LN upgrade, the level of interoperability between the two coins will increase Lightning network implementation, the number of ways to exchange Litecoin for Bitcoin and vice versa will increase, say, if a BTC holder wants to use a cheaper LTC for micropayments every day, they do not and go for an encrypted exchange to buy Litecoin first, they can simply perform an atomic exchange between two blockchains. embra catchy, right? Let's go deeper into how the Lightning network works and how the power balance in the encrypted market will change.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "What is the Lightning network?"data-reactid =" 24 ">What is the Lightning network?
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Lightning network it is a chain of payment channels powered by smart contracts and designed to facilitate direct agreements between users. It can work on Bitcoin blockchain or on any other, and can be used to exchange different coin chains due to the Atomic Swaps technology. The address of the Lightning Network wallet is accessible to two users wishing to conclude an agreement: they enter the number of coins to spend and confirm the transaction. The contract will be finalized only when both parties sign it. At any time, any user can close their unique channel, so the latest information on transactions and sales will be sent to the Bitcoin blockchain. "Data-reactid =" 25 "> The Lightning Network is an off-payment system of payment channels powered by smart contracts and designed to facilitate direct agreements between users. They can work on the Bitcoin blockchain or any other and can be used to exchange several cross currencies thanks to Atomic Swaps technology.The address of the Lightning Network wallet is accessible to two users who want to make a deal – they enter the number of coins to spend and confirm the transaction.The contract will be finalized only when both parties sign it. At any time, any user can close their unique channel, so the latest transaction information and balances will be sent to the Bitcoin blockchain.
What does this mean for normal crypto investors? Using the Lightning network, they can do business without synchronizing with blockchain all the time. Transaction data will be transferred via off-line payment channels.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "How will Bitcoin influence?"data-reactid =" 27 ">How will Bitcoin influence?
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The Lightning Network is designed to make payments more convenient and attract more users.This system could completely change the game for Bitcoin.For now, most users consider BTC to be a valuable store but not as a payment method due to high fees and slow processing time. able to become cheaper and more efficient, that will be a clear competitive advantage on some alt-overs. "data-reactid =" 28 "> The Lightning network was designed to make payments more convenient and attract more users. This system could be completely revolutionary for Bitcoin., most users consider BTC to be a valuable store but not as a payment method due to high fees and slow processing times.With the Lightning network, Bitcoin will be able to become cheaper and more efficient, that will be a clear competitive advantage over some altcoins.
Transaction speed
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Bitcoin's blockchain is based on Work test algorithm. It means that the miners confirm the chain transactions. They can decide in which order to check the offers and obviously they will have to choose those with higher commissions. "Data-reactid =" 30 "> Bitcoin's blockchain is based on the Proof-of-Work algorithm, which means that the miners confirm the chain transactions. They can decide in which order to check the offers and, of course, choose those with higher commissions.
How can the lightning network help here? Eliminate the miners' verification phase and increase transaction processing speed. Off-chain deals will be done in an instant.
Micro-payments
Bitcoin – whose current price is more than $ 6,400 – can be divided into smaller parts called Satoshis. Such a unit is equivalent to 0.00000001 BTC. As you can see, many Satos are needed to form even the smallest sum in cents.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "At the moment, taxes are too high that makes small Inefficient operations: Suppose an average rate of $ 0.2 purchases a coffee or you pay a subway ticket with unreasonable BTC. Litecoin offers $ 0.04 tax, which makes it a perfect cryptocurrency for micropayments. "data-reactid =" 34 "> At the moment, the rates are too high, which makes small transactions inefficient, for example, an average rate of $ 0.2 makes the purchase of coffee or the payment of a Metro ticket with unreasonable BTC, on the contrary, Litecoin offers $ 0.04 tax, which makes it a perfect cryptocurrency for micro-payments.
The implementation of the Lightning network can lead to a reduction in tariffs and make micro-payments with Bitcoin more realistic. All transactions will be based on smart contracts and the system itself will monitor the processes.
Possible drawbacks
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Behind its intention to solve the tax problem, we they are some controversial features in the Lightning network. He has his taxes for the opening and closing of a payment channel and for the transfer of assets between channels. At the moment, the last tax is zero, but the situation may change. "Data-reactid =" 37 "> Behind its intention to solve the tax problem, there are some controversial features in the Lightning network: opening and closing of a payment channel and for the transfer of assets between channels. this last rate is zero, but the situation may change.
<p class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Also, the use of the Lightning network can lead to more transactions on the chain if your wallet can not find a route to the receiver. In this case, a user must make two transactions to open and close a channel in order to possibly fulfill a payment. "Data-reactid =" 38 "> In addition, the use of the Lightning network can result in a larger number of transactions in the chain if your wallet can not find a route to the recipient, in this case a user will have to make two opening and closing transactions of a channel in order to possibly satisfy a payment.
There is also a problem of how it will be used extensively that is connected to the general adoption of cryptocurrencies.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "How will Litecoin influence?"data-reactid =" 44 ">How will Litecoin influence?
Litecoin is considered the silver in the world in which Bitcoin is seen as digital gold. Originally, LTC is the Bitcoin fork designed to offer faster and cheaper offers.
What impact does the Lightning network have in this currency? Skeptics argue that Litecoin will disintegrate as investors will prefer to use Quick and Cheap Bitcoin as the most famous and reliable resource. If BTC does indeed solve its scalability problems, no one will need other currencies to perform the same tasks.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "On the other side, optimists claim that Litecoin it can survive as a secondary chain: the founder of the project Charlie Lee claims that LTC will always remain less expensive and faster compared to BTC, and the Lightning network can only contribute to the wider adoption of Litecoin. "data-reactid =" 47 "> From the other side, optimists claim that Litecoin can survive as a secondary chain. The founder of the project Charlie Lee claims that LTC will always remain less expensive and faster than BTC and the Lightning network it can only contribute to the wider adoption of Litecoin.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "summing up"data-reactid =" 48 ">summing up
The Lightning network is designed to make instant and inexpensive blockchain transactions. While the main cryptocurrency still attempts to address the problem of scalability, this technology seems to offer a solution. But it may not be that simple. The success of the implementation of Lightning Network depends on several factors: the general adoption of cryptography, the use of altcoins that provide speed improvements and lower costs than BTC, or contradictions with respect to the nature of the technology.
<p class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This article it was originally published on FX Empire "data-reactid =" 50 "> This article was originally published on FX Empire
