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On September 14, the first day of the Litecoin summit took place in San Francisco, where several significant figures in the cryptocurrency space made their presence felt. Elizabeth Stark, the brain behind Lightning Labs gave a speech at the summit where she talked about how the technology behind the Lightning Network works.
He began by stating that the scalability problem was realized when Satoshi Nakamoto released the Bitcoin P2P e-cash card. Here, one individual pointed out that while the idea is concrete, the transactions will not be reduced. After this, a proposal was made by two members of the Bitcoin community, entitled "The Bitcoin Lightning network: out-of-scale instantaneous chain payments".
Next, Stark explained that the basic concept of Lightning was to create a series of contracts on top of Bitcoin as a second-tier solution, using a technology called Payment Channels. He also said that the network uses another technology called Hash Timeclock Contract, where all intermediate nodes can only receive funds if and only if they have forwarded them. Therefore, the transaction reaches completion or returns to the sender. This eliminates the risk of cybercrime, such as theft.
Presentation by Elizabeth Stark | Source: Litecoin Foundation
Regarding the elimination of counterparty risk, Stark has stated that it is not possible in the case of Lightning since a third party can not subtract funds due to the contracts applied on the blockchain. One of the main objectives of this technology is the creation of a peer-to-peer network in which the concept of a trusted financial intermediary is removed. In his words:
"Actually, it's a global and decentralized judge who can not be bribed – if you think of lightning transactions as contracts, not all contracts go to court, maybe you sign one with your job or contract lease, you're generally not going to court.If you do, the blockchain applies it. "
He also talked about the cross-chain transactions that the Lightning network has enabled for Litecoin and Bitcoin users. Here, two parties that have different cryptocurrencies [either LTC or BTC] can send and receive funds instantly on the network.
Alec Mac, a Twitter user who is also a Bitcoin cryptocurrency and maximalist specialist, commented on Stark's speech. He wrote:
"Elizabeth, you're a real hero for a cryptocurrency community, thank you." Your speeches are easy to understand and a great help for pushing information (right) Are you on IRC (freenode)? "[19659008] Another follower and blockchain enthusiast, Quan asked:
"So Lightning is more used as an advance payment / payment system, and could the software above this level be used as a postponed payment system?"
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