Lightning Network Stikes Bitcoin Mainnet
The most highly anticipated Bitcoin technology upgrade has arrived. Lightning Network transactions have been deployed on Bitcoin's mainnet. While some critics see the Lightning Network as an IOU system that will give control to centralized banking hubs, others are adamant that this will be a major breakthrough allowing for faster, cheaper transactions.
What is the Lightning Network?
The Lightning Network is an additional payment layer implemented on the Bitcoin protocol. This '2nd-layer' aims to support an unlimited number of off-chain Bitcoin transactions at a little to no fee. It uses a series of bi-directional payment channels to accomplish this. Users will open a new multi-signature Bitcoin address and deposit funds. These funds can be sent back and forth (off-chain) to whomever is associated with the multi-signature account. Once all parties are in agreement, the payment channel can be closed and the transaction will settle on the main Bitcoin blockchain.
Bitcoin Smart-Contracts
The Lightning Network layer allows for the implementation of programmable, self-executing smart-contracts on the Bitcoin network. The protocol includes 'Time-Locks' that can be used to set parameters for when funds can be sent. For instance, someone operating a payment channel can set a time, date or block number that must be reached before funds can be utilized.
Who's Behind It?
The Lightning Network was first proposed last year by developers Joseph Poon and Thaddeus Dryja. Currently, there are 3 teams working on Lightning Network implementations with help from community input. Lightning Labs (Ind) , ACINQ (eclair) and Blockstream (c-lightning). A recent test of the Lightning Network proved successful across all 3 implementations on the Bitcoin mainnet.
The Whitepaper - The Bitcoin Lightning Network: Scalable Off-Chain Instant Payments
by Joseph Poon & Thaddeus Dryja
Understanding the Lightning Network
by Aaron van Wirdum via Bitcoin Magazine
Mathematical Proof That the Lightning Network Cannot Be a Decentralized Bitcoin Scaling Solution
by Jonald Fyookball via Medium
"The Importance of Layer Two"
by Elizabeth Stark of Lightning Labs
How will the Lightning Network impact Bitcoin?
What do you think?