First let us understand :
What is lightening network ?
Simply -Lightning Network is a layer on the top of the Bitcoin Blockchain. It allows for fast and cheap transactions directly between two parties and because there are no miners that need incentives transaction fees are low or even non-existent.
Technically - Imagine there are 2 persons they will open a payment channel and put some bitcoin into a multisig address and then sign transactions that alter the amount of bitcoin each party is able to redeem. The payment channel can be closed by either party at any time, and the last-signed transaction with the most up-to-date balances for both parties is the one that will be broadcasted and included in the Bitcoin blockchain.
How does it work ?
Lightning allows you to lock coins between two wallets, and then send special transactions between each wallet which only become "real" when they are added to the blockchain. But you don't do that, because on-chain costs you more fees, so you keep updating the transactions between each other.
Lightning not only makes it possible to send transactions off-chain from A to B, but also from A to B to C etc. Which would make it possible to create one big network, where most transactions happen off chain, you don't need to trust anyone and where all transactions are immediately done.
We can do hundreds or millions of such transactions without broadcasting it back to the blockchain. When we create this channel that is outside the blockchain, we can do any number of transactions without burdening the entire network.
After understanding the concept now lets go ahead and i will share some of the benefits of bitcoin lightnening network .
Benefits :-
A) Micro -payments are possible - The smallest fraction of a bitcoin is called a Satoshi
(0.00000001 BTC). The Lightning Network enables payments and fees of
even smaller than a Satoshi, enabling micro-payments. This Network will allow people to transact pennies at a time. The biggest benefits is that the People in the poorest countries will be to afford transactions in bitcoin.
B) Millions of transactions per second - Lightning network offers one of the best scaling solutions. Lightning Network allow users to enjoy the security of the decentralized blockchain, without increasing the size of the blockchain unnecessarily. So it will do millions of transactions in seconds because of the channels created off - chain and later on updaed to blockchain .
C) Improved privacy - The Lightning Network will problably have top-notch privacy features. It will be much more anonymous than ordinary
Bitcoin transactions.
Although some businesses will run cheap Lightning Nodes to collect and sell
data. But lightning users can either use these low-cost lightning nodes or use higher-cost, that are more privacy oriented payment channels.
D) Instant payments - It is possibility to make payments immediately without worrying about confirmation times. The security of such transactions is possible thanks to smart contracts. In the Lightning network, payments do not need block confirmations and are instantaneous and atomic.
E) Smaller Block - As the transactions are between 2 persons through a payment channel on off-chain . Then , it will create smaller blocks and eventually the speed will be more as compared to bigger blocks. There is no need of confirmations as the speed of payement is lightening.
These are some of the Benefits of Bitcoin Lightening Network . Hope it will soon implemented . I think still its in beta testing . But it can be launched till year end .
That's all from me .
Hope u like this information.
Thanku
