Lightning Network

The Lightning Network is a decentralized network using smart contract functionality on the blockchain to enable instant payments across a network of participants. The Lightning Network will allow bitcoin transactions to happen instantly, without worrying about block confirmation times. It will allow millions of transactions in a few seconds, at low costs, even between different blockchains, as long as both chains use the same cryptographic hash function. The Lightning Network will allow two participants on the network to create a ledger entry, conduct a number of transactions between themselves, and after the process has finished, record the state of the transactions on the blockchain. As for now, the bitcoin network is capable of processing up to 7 transactions per second. The Visa payment network, for instance, is believed to complete 45,000 transactions per second during a regular holiday period. This protocol tries to solve the bitcoin scalability problem.

Enjoy reading? Please share: