Andreas Antonopoulos, a well-known Bitcoin supporter and author of Mastering Bitcoin, talked about whether or not a Lightning network can deal with downsizing issues in his last question and answer session on Youtube. He also talked about the need for SegWit on each chain for the implementation of Lightning.
The author started by explaining the Lightning network as a second-level network. He claimed that technology is an overlay network consisting of a series of smart contracts within the Bitcoin network, which allows users to make hundreds of thousands of offline payments with anyone in the world.
He added that the payments are private, fast and low cost because the on-chain network will only be used to open and close channels, resulting in a "much greater degree" of scalability than the Bitcoin blockchain. Antonopoulos continued saying that he will be "used only as the" judge " [in settlement]".
This was followed by the Bitcoin supporter who was talking about the possibility of a scaling problem if the payment channels were heavily loaded. He said:
"The amount of calculation needed to calculate a hash timeel contract … and the path [through channels] is such that … If you have two Lightning nodes on a well-connected network and exchange transactions between them … as fast as you can, [could] you make hundreds of thousands of [payments] per second. Transactions are only seen from [the nodes involved in a channel]".
Antonopoulos went on to say that there may be other nodes producing hundreds of thousands of payments on the second or one hundred thousand nodes, each of which makes hundreds of thousands of transactions one with the other. However, he added that the activity between two nodes in one channel does not really affect the rest of the network. He said:
"[…] therefore decentralizes the downsizing. The Lightning Network is not only much more private, because these payments … on payment channels are not seen by anyone other than the participating nodes, but it is much more difficult to censor because you do not need a miner [to confirm them until settlement]. [Lightning is] also much faster and cheaper. "
Later, the author talked about the need for each chain to run SegWit to make lighting compatible. SegWit aka Segregated Witness refers to a protocol update that changes the way data is stored. This protocol was activated both on Litecoin and on Bitcoin at the beginning of 2017. The main reason for the beginning of the protocol was the correction of a bug in the Bitcoin code, a malleability and transactional bug, which allows people to to change the next hash.
He stated that it is possible for a user to implement a Lightning implementation without SegWit, however, it would be a "more complicated" process. This is due to the bug of the malleability of transactions, as both chains require a correction of the malleability of transactions even if they are not SegWit. He said:
"It could be a different solution for the malleability of transactions.It is very difficult to implement Lightning safely on a chain that has a problem of malleability of transactions, SegWit has solved it on Bitcoin and Litecoin. a different solution, which would make lightning possible. "
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