Solving Bitcoin’s scalability issues is one of the biggest and the top-most priority for developers this year. Having witnessed an unprecedented run with humongous trading volumes till the mid of December 2017, the major issues, which the Bitcoin investors and traders faced, were slow transaction speed and higher transaction costs.
This unique concept of Lightning Network was first proposed by Joseph Poon and Thaddeus Dryja with just one aim of making the Bitcoin network more useful. Under the existing situation, Bitcoin network is limited to handle around three to seven transactions per second. If Bitcoin has to really achieve a mainstream adoption in the market, it needs to come close and compete with Visa, which can process thousands of transactions in a second.
Poon and Dryja pitched the concept of Lightning network by visualizing it as a second layer of code over Bitcoin’s blockchain, which could offer support to thousands of transactions with reduced transaction costs, more reliability, and advanced privacy and security features in place.
Rusty Russel, a developer at blockchain technology company ‘Blockstream‘ called their work “the second most exciting paper I had read in the blockchain era. The first was Satoshi’s.” While further praising the Lightning Network, Russel stated:
“When you first heard about bitcoin, you probably heard about ‘instant payments around the world for free’. But if you dug into it, it wasn’t really that cheap, and it was never instant. Lightning actually does those things.”
Last month, in December 2017, the Lightning Developers announced successfully testing the version 1.0 RC of the lightning protocol specification in addition to cross-implementation test on the Bitcoin mainnet. With an open collaborative process, the specifications for the Lightning protocol have been developed by three teams – Blockstream, ACINQ and Lightning Labs.
As a part of their interoperability work, the three teams have also created their own Lightning Network and have tested cross-compatibility across three versions by seamlessly routing payments without being incompatible or isolated. In a further push to the development process of the Lightning Network, the data provided by Reddit last Thursday shows the development of Lightning nodes on the Lightning Network. Currently, the Lightning Network hosts around 40 nodes and 60 channels as the development process continues to move further.
Lightning Network developer Jack Mallers announced on Twitter:
“I only paid a 0.0003515 BTC (~$4) fee to open the channel! I can’t seem to find those $100+ fees I’ve been hearing so much about” to which Blockstream CSO Samson Mow replied by joking describing it as “unfairly cheap”.
THIS IS UNFAIRLY CHEAP. https://t.co/E911LyI59Y
— Samson Mow (@Excellion) January 18, 2018
Moreover, last week, Blockstream also launched its merchandise store for immediate support of Lightning payment. Developers considered this decision an important one, able to help the concept gain mainstream trust and adoption.
Introducing #LightningCharge, a new micropayment processing system that makes it easy to build apps on top of #Lightning. It’s already powering the @Blockstream Store, an e-commerce site we're launching today! https://t.co/Sqmv4d2ze6⚡️#LightningNetwork #Layer2 #micropayments pic.twitter.com/18jZcAXY6o
— Blockstream (@Blockstream) January 17, 2018
However, despite these developments, businesses are acting quite slow when it comes to implementing things. With the Bitcoin network currently struggling to cope up the demand, a recent petition has been introduced to force Coinbase to upgrade its platform with the Segwit technology and thereby help users save considerable money and time.
These developments are really interesting and arrive at a time when Bitcoin price has been correcting majorly in the past few days. Further push to the development of Lightning Network can help restore the confidence among Bitcoin enthusiasts and investors contributing to wider participation coming back into Bitcoin buying.
Among other news should be mentioned Intercontinental Exchange (ICE), which is launching a new cryptocurrency-based data feed together with blockchain startup Blockstream to provide real-time information from more than 15 cryptoexchanges, including data on prices, trading volume and order book for the leading cryptocurrencies.