Great news! A new layer at the bitcoin promise us more transactions per second, and lower transactions fees.
Problems Bitcoin:
High transaction fees, 10 transactions per second (Paypal 1800+ and VISA 1600+ transactions per second), huge difference.
Earlier solutions:
There was a lot of fight between to sides of the bitcoin community. one side would have bigger blocks, other would like to add segwit (https://en.wikipedia.org/wiki/SegWit) Make blocks bigger could give a lot of problems so team Segwit won. That implemented in 2009 and we still use it. But if Bitcoin will grow, and let other coins behind. They need something news. And now we have Lightning Network, a lot of people are really enthusiastic about it (include me).
Here are some improvements:
- Faster transactions
- Lower transaction fees
- Anonymity
- Atomic swaps (payments over multiple blockchains)
- Micro payments become possible
How is this possible? Everyone thought is is impossible to get more efficiency in the Bitcoin?
Well, it was hard. But the developers were really creative and found something. To improve the bitcoin blockchain is impossible. So they added a new layer! All transactions would be offchain. And so it's possible to use more blockchains for one transaction. Incredible right!? So they can make a lot of blockchains, a payment blockchain for you and your friend to see who what pays? And they found something else. At the moment it is, if I and my friend name him Bob, gets 2 Bitcoin, and I will give my friend Bob 1 BTC? Than I give him a promise over the blockchain, and he gets it when the payment channel closed. But I give Bob every week something, and he me. Than we ask a lot more of the Blockchain than we have always a open blockchain and not promise but give.
Not everyone likes it, there is a chance it will a little centralize, you need both online to use a payment gate. Bitcoins are stuck into a payment gate, if you deposit into, you can only send to the other side.
So there needs a lot of improvement! But it's a step to improve the network. And there are developers full time working at a new better Bitcoin and working for the maybe future money! But easier is to use coins as NANO (https://nano.org/en) They have all this, but haven't to open or close gates.
If you have any questions, please ask in the comments below. And please let know if you like Lighting Network, for the people who like to visit the site or whitepaper I'll post it in the comments
- Sebas