WHAT IS LIGHTNING NETWORK www.developcoins.co m
● What is Exactly Lightning Network? ● How does the Lightning Network work? ● Overview of Lightning Network Architecture
What we covered here!
● Who developed the Bitcoin Lightning Network? ● Advantages & Disadvantages of Lightning Network ● Interesting facts about Lightning Network ● Where is Lightning Network used? ● Current Stage of Market Adoption ● Future of Lightning Network 2
While Bitcoin provides a solution to many of the problems given by our current economic system, it still has some difficulty. One of its biggest limitations concerns the speed and price of transactions, exclusively during busy times. These limitations prevent it from becoming a true medium of
Introduc tion about Lightnin g Network
exchange for day to day microtransactions, like cash or credit card. The lightning network was developed to solve just that. Created as a second layer over the bitcoin network, it allows the user to transfer Bitcoin between one another instantly and without any fees. This is made feasible by creating payment channels between two users. Payments can also be made 3
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Lightning Network World’s Fastest Blockchain Platform
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Who develop ed the Lightnin g Network ?
⊙ Joseph Poon ⊙ Thaddeus Dryja ⊙ It has since evolved into a community effort with thirdparty individuals and even companies providing to specifications and implementations. 5
Overview of Lightning Network Architecture Bitcoin Lightning Network Protocol helps instant off chain micro payments, while Ethereum Plasma Framework allows child chains to be pegged to root blockchain. 6
How does the Lightnin g Network work?
The Lightning Network is dependent upon the underlying technology of the blockchain. By using real Bitcoin/blockchain transactions and using its native smart-contract scripting language, it is possible to create a secure network of participants which are able to transact at high volume and high speed. This technology is using bidirectional payment channels. Two users freeze the same amount in the Blockchain network to open a payment channel between each other, and then use debt receipts among themselves to perform a transaction. 7
For example:
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Advantages & Disadvanta ges of Lightning Network 9
Advanta ges of Lightnin g Network
Scalability
Outstanding Anonymity
Lower Fee
Micro payments
Higher Speed
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Disadvan tages of Lightning Network
1. At this time the Bitcoin Lightning Network is on a beginning stage and hence huge important transactions are still better to carry out in the main Bitcoin Blockchain network. 2.P2P protocol handle in Lightning Network needs both peers online in order to complete a transaction. Should one gets offline, the broadcasting stops suddenly. 3.You can’t top up the channel from the mainnet. It’s called "Channel depletion", a situation showing when the first node transfers all the funds of the channel to the second node. Then such a channel can work only in one path direction, hence sending funds from the first node is impossible unless the second one transfers part of the funds back, or the two nodes will have to open a new payment channel. 11
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