The Lightning Network has been years in the making, with the original whitepaper being published in January 2016. Finally, the top independent development teams have announced that their implementations have completed the first tests on the main Bitcoin network.
The Proof of Concept We’ve Been Waiting For
The three teams currently working on independent Lightning Network implementations have announced that their respective systems have completed payments on the main bitcoin network. Along with this, its proven the interoperability of these systems. Interoperability is the idea that these separate implementations will all work on together on one network. They’ll be able to work together seamlessly, receiving and sending payments to each other without issue.
ACINQ, Blockstream, and Lightning Labs are the teams currently working on building a working network, and these tests show that these systems are closing in on mainstream adoption. The teams, along with other members in the Bitcoin community, have also developed a set of standards to follow for any team looking to build their own implementation. The standards ensure that no matter the implementation used, users will all connect to the same network.
Achievement unlocked: We've created a fully compatible Lightning Network on bitcoin!
https://t.co/wTqI4uKhkd
— elizabeth stark (@starkness) December 6, 2017
Where Does LN Go from Here?
The developers have made it very clear that they are not going to rush the software out the door prematurely. Lightning developer /u/RustyReddit commented on a recent Reddit AMA about the dev’s release timeline, saying:
I expect implementations off test net this year, in alpha, maybe even beta. Then you can lose real money!
These implementations could have major affects on how the $270 billion currency operates, and any software that could possibly lose customer funds is dangerous to the ecosystem. All the implementations still must go through rigorous testing to make sure they’re safe before the masses start hopping aboard.
The same developer commented elsewhere on the AMA when asked about if businesses are expressing interest in working implementations:
They’re almost too eager, actually.
The reason is simple: it’s way easier to accept lightning payments than on-chain bitcoin. For example, in c-lightning, you tell it what you’re selling and how much, which gives you a long lnbc… string to hand to the user (eg QR code). Then listinvoice tells you whether it’s paid it not (waitinvoice lets you wait for it, if you don’t want to ask over and over).
That’s it. Go build your awesome storefront.
With LN, it makes sense that more businesses will start to accept Bitcoin as LN offers fees that can be as low as a penny. This can mean the world to businesses being affected by credit card fees or the currently high Bitcoin transaction fees.
How Does the Lightning Network Work?
The Lightning Network is the next step in the scaling roadmap and is an incredible piece of technology. It allows for two parties to transact with each other many times before actually broadcasting a transaction. A great example is two businesses that transact dozens of times a day. Both businesses put one bitcoin in the payment channel, and can pay back and forth as many times as they’d like. Business A can pay B 0.1 BTC, then B pays A 0.3, over and over. At the end of the day, let’s say Business A’s balance is 1.1 BTC and B’s balance is 0.9 BTC. Instead of broadcasting every transaction to the blockchain and have to pay the associated fees, Business B will just broadcast one transaction of 0.1 BTC.
For a more technical explanation, you should watch this excellent presentation by Joseph Poon:
This is a very exciting time in Bitcoin development, and the Lightning Network will be revolutionary for all cryptocurrencies.
Are you excited about the full release of the network? Do you plan to use it? Let us know in the comments below!
Images courtesy of Lightning.Network