Bitcoin as the first cryptocurrency in existence as passed through many phases of both development and criticism, most of which has prove the value and global usefulness of cryptocurrency in general to the world.
Bitcoin before now has in many ways fulfill the dream of it founder(s), but with it recent popularity and expansion in network is struggling currently to fulfill the utmost dream of which it might have been designed for.
Satoshi's Dream according to the white paper released back in 2009 explaining his vision was to create a peer to peer electronic cash system
that is free to use instantly and eliminate centralized bodies such as government and banks which are engine room for corruption and manipulation.
The Bitcoin dream has been that the birth of a new digital currency will save the world from huge government tax, save individuals and businesses from high transaction fees and offer instant transfer of money from one party to another even across the boarders.
Unfortunately the design of bitcoin protocol to to only process 7 transaction per second due to it 1mb block size has caused a scalability issue for the fast arising digital currency.
As a result of this scalability issue, transaction fees have seen an all time high of $30 with delayed processing of transactions that cannot be fit into a block.
A Proposed Solution
Two passionate bitcoin developers called Joseph Point and Thaddeus Dryja meet to rub minds together and came up with a proposed solution called The Lightning Network which they believe will solve the scalability issue of bitcoin and when implemented will allow instant and little fees transaction to take place in the bitcoin network.
While the lightning charge went live on January 18, 2018, the lightning network specifications was released in December 2017.
How The Lightning Network will Work?
The lightning network will be built on top of Bitcoin and would allow people instantaneously send/receive payments and reduce transaction fees by keeping them off the main network.
According to the full explanation on the network paper website https://lightning.network
Lightning is a decentralized network using smart contract functionality in the blockchain to enable instant payments across a network of participants.
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.
Bidirectional Payment Channels. Two participants create a ledger entry on the blockchain which requires both participants to sign off on any spending of funds. Both parties create transactions which refund the ledger entry to their individual allocation, but do not broadcast them to the blockchain. They can update their individual allocations for the ledger entry by creating many transactions spending from the current ledger entry output. Only the most recent version is valid, which is enforced by blockchain-parsable smart-contract scripting. This entry can be closed out at any time by either party without any trust or custodianship by broadcasting the most recent version to the blockchain.
According to CoinDesk Blockstream launched a Lightning-only merchandise store using its own Lightning implementation, c-lightning, and a Lightning main net explorer suggests more than $33,000 in bitcoin has been transacted via Lightning Networks.
What do you think about the bitcoin lightning network? Can it be the saviour to bitcoin scalability and scaring problem? Or another proposed solution will work better?
References
https://medium.com/@argongroup/bitcoin-lightning-network-7-things-you-should-know-604ef687af5a
https://en.m.wikipedia.org/wiki/Lightning_Network
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