Although the lightning network did not exist when Bitcoin currency was introduced in 2009, Lee believes it can help Bitcoin move in the right direction: a completely decentralized peer-to-peer payment network.
From a technical point of view, Lightning Network is a ‘two-tier’ payment protocol based on blockchain operation, used for chain settlement transactions. With the lightning network, there is no need to worry about the confirmation time on the chain is too long, effectively solving the bottleneck problem of the blockchain — realizing the instant processing of the transaction and accelerating the blockchain confirmation time.
A development team at Lightning Networks said the technology ‘can achieve millions to billions of transactions per second in the network,’ and properly took out several streets of traditional payment methods.
Lee’s first tweet says:
Bitcoin and Litecoin LTC payments on the chain are not point-to-point. The sender’s transaction begins with the miner and records it on the distributed ledger. The recipient will receive the funds only after the record is completed. But this process is done through a peer-to-peer network where transactions are broadcast.
Lee pointed out the difference between the two different transfer methods, and he believes that the broadcast process improves the certainty of individual transfers.
He said in the second tweet:
This broadcast network is peer-to-peer, but in a strict sense, payments are not point-to-point. The sender of the transaction can ignore this peer-to-peer network and send the transaction directly by communicating with the miner. The sender does not need to communicate with the receiver in any peer-to-peer manner!
Lee explains the ease of communication between the sender of the transaction and the miner. He believes that there is another option to trade without the sender’s intervention:
This is actually a good thing because the recipient does not need to stay online and receive the transaction. Ironically, the chain payment is very close to the hubandspoke model, where the pool is the center and users only need to connect to these centers to send transactions.
He went on to mention that the lightning network is truly based on a peer-to-peer network:
Lightning network payments are point-to-point payments, and such payments are sometimes point-to-point, sometimes indirect. Lightning network payments need to be sent from one point to another in order to reach the recipient from the sender. Both parties must be online, just like a peer-to-peer network like BitTorrent.
In Lee’s view, lightning network payments do not need to rely on third parties to complete:
Because lightning network payments are point-to-point, they work even if the peers disconnect from the network. The sender can even send a transaction to the recipient by directly establishing a connection, without relying on any other third party at all.
Finally, Lee concludes that Bitcoin with lightning network is more in line with Nakamoto’s vision: a peer-to-peer electronic cash system.
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Bitcoin price is $6645.07 on October 9, 2018, increasing 0.88%. Litecoin price is $59.10 on October 9, 2018, increasing 2.34%.