Topic: Why the Lightning Network Can Help Pump The Price of BTC To New Highs (Read 185 times)
February 16, 2018, 05:25:04 PM
I like how the LN can improve the speed of the network and decrease the cost of transactions. Note that there is also a darker side. LN will make the system more vulnerable and have the ability to limit access. Transactions are to be processed by hubs and those hubs can become a target of hackers, government organizations, they will possibly have the ability to restrict certain transactions from ultimately ending in the blockchain. All of these things have not yet happened and we can't be sure if they ever will, but if we can be talking about them some agencies or companies will most likely try them out.
February 16, 2018, 05:22:55 PM
Well if Lightning Network resolves our current issues of high transaction cost and slow confirmation time then I'm sure that it will pump bitcoin to all-time-high. Expectations are already high, everyone is really looking at the day when LN will be rolled out. Definitely there will be a lot of problems in the beginning, just like any other software implementations but for sure this is the best solution and we need it time to work before we can say that its a success or a failure. I myself, is really looking forward at it and wanted to see bitcoin's price skyrocketed once again and maybe it could bring us to closer for bitcoin to become mainstream.
February 16, 2018, 05:06:55 PM
Interesting.However one gets lost in that Alice/Bob's transactions part.I was able to understand because I know what LN is but for the newbies,it's really complicated to follow how LN will exactly speed up the transactions.The title however is misleading ,please edit that to " Why the Lightning Network".
Thanks for your input. The title begins with " Why the Lightning Network", or do you think I should remove the rest of the title so that it only says " Why the Lightning Network"? February 16, 2018, 02:30:59 PM
Interesting.However one gets lost in that Alice/Bob's transactions part.I was able to understand because I know what LN is but for the newbies,it's really complicated to follow how LN will exactly speed up the transactions.The title however is misleading ,please edit that to " Why the Lightning Network".
February 13, 2018, 12:18:27 PM
Credits go to: Elizabeth Stark
To understand the lightning network you first have to understand how a blockchain works.
Imagine if every computer had to store every e-mail in the world, to be able to receive any. That's how blockchains work.
Lightning Network allows computers to make blockchain transactions but only storing the data they care about—their own money.
Lightning Network is a protocol for scaling and speeding up blockchains. It was designed to solve some of the technical limitations of the Bitcoin blockchain, but it could be implemented on top of any blockchain.
The Lightning Network will make Bitcoin transactions significantly faster
Bitcoin has still not gotten so far as to be accepted as the ultimate payment method for everyday use. The speed and cost of Bitcoin transactions can be one of the reasons why. That is why I hope that The Lightning Network can bring Bitcoin closer to ordinary people.
While Visa can process tens of thousands of transactions per second, Bitcoin's network is limited to less than 10 per second. Another motivator for Lightning’s development is that the Bitcoin blockchain’s “block confirmation time” is approximately 10 minutes long. That means it takes 10 minutes for a bitcoin transaction to confirm. Further, transaction fees on the Bitcoin blockchain can run between 5 and 10 cents per transaction, rendering micropayments infeasible. Lightning Network, can enable near-instant transactions, at a rate of thousands to millions per second, with fees of a fraction of a cent (or even free).
Lightning Network is based on a technology called payment channels. A two-party payment channel is created when both parties create a 2-out-of-2 multi signature transaction on the blockchain, with at least one party committing funds to the 2-of-2 ledger entry. Each person has one private key, and transactions spending from the ledger entry can now be made only if both keys sign. This initial transaction to open a channel takes 10 minutes (or whatever the normal block time is), but afterward the participants can transact with each other instantly using the funds allocated in that channel. These instantaneous transactions are made by passing signed transactions back and forth, spending from the 2-of-2 ledger entry.
In a payment channel, signed transactions are not broadcast until the participants want the channel to stop operating.
Here is an example of how The Lightning Network looks like in practise:
Alice and Bob, create an initial transaction on the blockchain for $20, where each party has $10 of the value.
This initial allocation can then be updated, such that Alice then has $5 of the total $20 value, and Bob has $15, and so on. When the participants have finished transacting with each other, the most recently exchanged transaction signature is broadcast to the network, finalizing the movement of the funds in the channel—some to one party and (if any remain) some back to the other.
Lightning takes the technology behind payment channels and creates a network of these channels, using “smart contracts” to ensure that the network can function in a decentralized capacity without any risk. As an example, Alice may open a channel with Bob, who in turn has a channel with Carol, who has one open with Dave. If Alice wants to transact with Dave, she can send funds via Bob and Carol, and Dave will ultimately receive them. But, because of multi signature and smart contracts inherent in the design of Lightning, Alice doesn’t need to trust Bob and Carol as intermediaries—the protocol uses cryptography to ensure that the funds will either reach Dave through Bob and Carol or else be automatically refunded to Alice.
Bob and Carol function as “nodes” on the network. They function as the servers that process the transactions on the network in a decentralized manner. Like miners, they do not have control over the funds they help move. Bob cannot steal Alice’s funds, as he will only receive the sender’s incoming payment if he has already sent the outgoing payment to the recipient. Thus, receiving a payment is dependent on having already forwarded it. Lightning payments are conditional upon disclosure of a cryptographic secret, and knowledge of that secret allows for redemption from prior nodes (when Dave redeems from Carol, Carol can now redeem from Bob).
Lightning Network can work on the Bitcoin blockchain, on other blockchains, or it can be used to instantly transfer different assets between blockchains using “cross-chain atomic swaps.”
With Lightning, small transactions or payments can flow through the network similar to how packets flow through the Internet. It has the potential to create new use cases that were not previously possible, such as machine-to-machine payments, content micropayments, and instant asset swaps.
How do you guys feel about this, how much more until the lightning network is released?
I think this will be the signal for new capital entering the crypto world and imagine the possibilities if all popular blockchains adopted this idea and in the future every transaction would happen in the blink of an eye at almost no cost!?!
Credits go to: Elizabeth Stark
I read a great article about the lightning network and the advantages it will offer to the Bitcoin blockchain.
I would like to hear your opinions about the lightning network and when do you think it will see the light of day?
I would like to hear your opinions about the lightning network and when do you think it will see the light of day?
To understand the lightning network you first have to understand how a blockchain works.
Imagine if every computer had to store every e-mail in the world, to be able to receive any. That's how blockchains work.
Lightning Network allows computers to make blockchain transactions but only storing the data they care about—their own money.
Lightning Network is a protocol for scaling and speeding up blockchains. It was designed to solve some of the technical limitations of the Bitcoin blockchain, but it could be implemented on top of any blockchain.
The Lightning Network will make Bitcoin transactions significantly faster
Bitcoin has still not gotten so far as to be accepted as the ultimate payment method for everyday use. The speed and cost of Bitcoin transactions can be one of the reasons why. That is why I hope that The Lightning Network can bring Bitcoin closer to ordinary people.
While Visa can process tens of thousands of transactions per second, Bitcoin's network is limited to less than 10 per second. Another motivator for Lightning’s development is that the Bitcoin blockchain’s “block confirmation time” is approximately 10 minutes long. That means it takes 10 minutes for a bitcoin transaction to confirm. Further, transaction fees on the Bitcoin blockchain can run between 5 and 10 cents per transaction, rendering micropayments infeasible. Lightning Network, can enable near-instant transactions, at a rate of thousands to millions per second, with fees of a fraction of a cent (or even free).
Lightning Network is based on a technology called payment channels. A two-party payment channel is created when both parties create a 2-out-of-2 multi signature transaction on the blockchain, with at least one party committing funds to the 2-of-2 ledger entry. Each person has one private key, and transactions spending from the ledger entry can now be made only if both keys sign. This initial transaction to open a channel takes 10 minutes (or whatever the normal block time is), but afterward the participants can transact with each other instantly using the funds allocated in that channel. These instantaneous transactions are made by passing signed transactions back and forth, spending from the 2-of-2 ledger entry.
In a payment channel, signed transactions are not broadcast until the participants want the channel to stop operating.
Here is an example of how The Lightning Network looks like in practise:
Alice and Bob, create an initial transaction on the blockchain for $20, where each party has $10 of the value.
This initial allocation can then be updated, such that Alice then has $5 of the total $20 value, and Bob has $15, and so on. When the participants have finished transacting with each other, the most recently exchanged transaction signature is broadcast to the network, finalizing the movement of the funds in the channel—some to one party and (if any remain) some back to the other.
Lightning takes the technology behind payment channels and creates a network of these channels, using “smart contracts” to ensure that the network can function in a decentralized capacity without any risk. As an example, Alice may open a channel with Bob, who in turn has a channel with Carol, who has one open with Dave. If Alice wants to transact with Dave, she can send funds via Bob and Carol, and Dave will ultimately receive them. But, because of multi signature and smart contracts inherent in the design of Lightning, Alice doesn’t need to trust Bob and Carol as intermediaries—the protocol uses cryptography to ensure that the funds will either reach Dave through Bob and Carol or else be automatically refunded to Alice.
Bob and Carol function as “nodes” on the network. They function as the servers that process the transactions on the network in a decentralized manner. Like miners, they do not have control over the funds they help move. Bob cannot steal Alice’s funds, as he will only receive the sender’s incoming payment if he has already sent the outgoing payment to the recipient. Thus, receiving a payment is dependent on having already forwarded it. Lightning payments are conditional upon disclosure of a cryptographic secret, and knowledge of that secret allows for redemption from prior nodes (when Dave redeems from Carol, Carol can now redeem from Bob).
Lightning Network can work on the Bitcoin blockchain, on other blockchains, or it can be used to instantly transfer different assets between blockchains using “cross-chain atomic swaps.”
With Lightning, small transactions or payments can flow through the network similar to how packets flow through the Internet. It has the potential to create new use cases that were not previously possible, such as machine-to-machine payments, content micropayments, and instant asset swaps.
How do you guys feel about this, how much more until the lightning network is released?
I think this will be the signal for new capital entering the crypto world and imagine the possibilities if all popular blockchains adopted this idea and in the future every transaction would happen in the blink of an eye at almost no cost!?!
Credits go to: Elizabeth Stark
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