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Did you know? Lightning addresses and bitcoin addresses are not compatible.
This means that a user can not send money from his lightning address directly to a recipient's bitcoin address, or vice versa, without going through a further step to transfer their lightning-fast funds
It seems counterintuitive, especially since layer-two technology for off-line transaction, is touted as a way to revolutionize the scaled protocol – more users and more transactions. Yet, there is this incompatibility between new transactions of out-of-chain lightning and bitcoins in the old-school chain.
A developer, however, worked on a possible solution, and was inspired by an interoperability technology that was slowly gaining steam – atomic exchanges.
Lightning Labs developer, Alex Bosworth, was looking at atomic swaps, a technology that allows the native cryptocurrency of a blockchain to be traded with another without intermediaries when it hit him that it could be used to exchange lightning for old style on-chain bitcoin.
Called "submarine swaps", which technology is now being tested on the live lightning network.
Although, proving it could actually be dangerous. Much like the transaction on the nascent lightening network, Bosworth admitted when he announced the launch of the project's mainnet that using submarine swaps at this stage is a risky venture.
"There's still a lot to build, but it's more fun to try on mainnet", he tweeted, using the "reckless" hashtag, which became a battle cry for developers who use the technology Experimental with real money.
For his work, Bosworth has established a connection between the bitcoin blockchain and the lightning network with technology. Currently, the technology only supports funds sent by a blockchain to the lightning network, and not the other way around.
But exchanging lightning chain link payments should be possible even one day.
And Beyond this, Bosworth envisions a future in which every bitcoin or cryptocurrency portfolio supports technology one day and, as such, it would be equally easy to send litecoin, dogecoin or any currency to a flash address.
A test etherum [19659013] Meanwhile, this multi-currency world Bosworth is itching because it is already being tested.
Jason Wong, an aviation software developer also interested in cryptocurrency, started playing with swap submarines not so long ago, starting by showing something of lightning prices the network can be purchased using litecoin.
"The same chain exchange is good but the cross-chain exchange is even better", as Wong has included in a recent blog post.
But Wong told CoinDesk he wanted to go even further.
"It will reach … more users if the submarine can support ethereum," he said.
Thus, a couple of weeks ago he implemented another version of the technology, allowing the flash-priced items to be purchased with ether, the native cryptocurrency of the blockchain ethereum, the second largest by market capitalization. And with Bosworth's help, Wong showed that trade can be done.
Serious change
Even if the technology is new, there are also cases of serious use.
One is "filling" the lightning channels, which will most likely be a common requirement.
That's why a complicated thing about lightning is that users need to set up channels with a certain amount of money in them. This process of creating a channel costs on-chain transaction costs, and those have been known to increase when more people use cryptocurrency.
Suppose you open a lightning channel for $ 20 dollars in bitcoins. But then quickly use those funds that deal with others.
Instead of opening a completely new channel – and incurring more transaction fees – a slightly cheaper route would be to top up the existing channel using an undersea exchange to trade the chain of funds for extra out-of-chain funds.
In sites like Satoshis.place, made exclusively for lightening payments, with submarine swaps, users could potentially pay in whatever currency they want, both on bitcoin, ethereum, litecoin and many more.
Perhaps, however, one of the most interesting uses for submarine trade is the crypto-cryptographic exchange. While atomic swaps are usually seen as the main technology working to achieve this goal (allowing users to transfer bitcoins to litecoin or dogecoin to ethereum), in some ways submarine swaps could do even better work.
This is because in order to do an atomic swap, the lightning must be enabled on both cryptocurrencies and, at the moment, only a handful of cryptocurrencies has a functioning lightning-fast network.
But with submarine swaps, only one side of the trade needs lightning.
This type of swap therefore, according to Bosworth, requires less work by developers who want to support a variety of different currencies without having to go through the long process of integrating each one individually.
Speaking from the developer's point of view, Bosworth said CoinDesk:
"I want to support your choice of money spends, but I do not want to add support for many different currencies."
"Utopian swap future"
Bosworth's ambitions for trade beyond these uses, however.
In a conference describing his vision for technology a couple of months ago, Bosworth goes so far as to envision a "future of utopian exchange" – highlighting a variety of types of exchange.
Beyond submarine swap, for example, HTLCswaps could allow users to exchange illicit payments for data.
However, there is still a long way to go before the future comes true, even if it specifically refers to submarine swaps. For example, through the tests, Bosworth has unveiled "many challenges".
"My concept was that swaps could be something very cheap to provide, like what a cell phone could do," he said, emphasizing this problem with that particular idea is that submarine swaps are more difficult to perform. when a blockchain is seeing a higher transaction volume.
Since the bitcoin testnet is currently being exploited with transaction spam, clogging the network, Bosworth discovered it the hard way he was experimenting with the technology there.
Still, he did not stop his search. Instead, the short-term goal of Bosworth is to find a way to effectively analyze this spam, in the hope of ensuring that smartphones can always handle a submarine exchange.
Interior submarine image through Shutterstock
The leader in blockchain news, CoinDesk is a source of information that fights for the highest journalistic standards and sticks to a strict set of editorial policies. CoinDesk is an independent operating subsidiary of the Digital Currency Group, which invests in criptovalute and blockchain startups.
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