After years of scaling debate and civil war the most promising scaling solution is about to be available for the common user! Eclair announced today that the main net Lighting wallet is online and the Android wallet will follow next week! Congratulations!
What is Lightning?
Lightning is a system of payment channels that runs on top of the Bitcoin blockchain. Payments in a payment channel take place off chain and are instant and extremely cheap. When multiple payment channels are open you only have to connect with one of the nodes in the network to be able to make payments with everyone connected.
You only have to create one on chain transaction to fund your Lightning wallet and one to take BTC out. When this is done a normal BTC transaction fee have to be paid. This system will greatly increase the capacity of the network, because once a funding transaction is made you can transact unlimited without putting load on the blockchain.
HERE I wrote recently that the Lightning Network is moving fast and we need some patience for a consumer ready wallet. I expected it to take a few months, but after a few days it is already here!!
Bitcoin and Litecoin will be enormously scalable together
As written HERE, the Lightning Networks of BTC and LTC will be connected and exchangeable through atomic swaps. This means that you can send someone LTC and they can receive BTC if they prefer, and all for a tiny fee and instant!
The capacity of LTC is 4 times bigger than BTC, so together the capacity is 5 times as big as Bitcoin alone. When scaling effect of the Lightning network is added to that we see a huge capacity. Bitcoin is finally ready for mainstream adoption!
Uhhh, not so fast
Ok I have to admit, the network is not complete like described tomorrow. When the Android wallet comes out it will be ‘send only’ first. The reason is that you need to be online all the time to avoid cheating when you receive funds.
This will be solved by implementing watch towers, this are other nodes that earn a fee by watching incoming transactions to offline nodes and direct them to te blockchain as a judge when they are cheating. This will cost some time to implement, but this will not be long! Mass adoption won’t happen overnight, so when it starts now I believe Bitcoin can scale fast enough to absorb the growing demand.
Conclusion:
Over the previous months the Lightning Network was growing exponentially, but the common user couldn’t use it yet because they would have to set up a node and this is fairly complicated. Today the first online wallet came out and next week you will be able to use LN on your smartphone too.
Since many Lapps are build already the wallet will be useful from the start and adoption could skyrocket! You can now already buy VPN at Torguard or top up your phone at Bitrefill and when you own a website that is build in Wordpress you can easily accept LN payments using the plugin!
Disclaimer
This is no financial advice, just my view on the market.
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