Bitcoin: Lightning Network goes live

The company Lightning Labs (0.4-beta Ind) today announced the latest version of their software releases . Lightning transactions are now also available in the Bitcoin main net and not only in the test network.

The biggest problem with Bitcoin at the moment is the scalability. Since each transaction is written to a block, the block cannot be larger than 1 MB, and only every 10 minutes a new block is found, Bitcoin can currently process only significantly less than 15 transactions per second (even with SegWit).

Remedy for this creates the so-called Lightning network, which is developed by the Californian company Lightning Labs. The idea is that not all transactions must take place on the blockchain, but a part can also take place outside the blockchain (off-chain). This makes sense especially when transactions take place between two participants who trust each other anyway or regularly send their credit balances back and forth.

With the Lightning network, the limitation of transactions on the blockchain is eliminated, as most of the transactions can easily take place off-chain. This not only makes Bitcoin much more scalable, but also makes lightning transactions much cheaper.

Lightning Labs today announced its 4th version of the lnd software. Although this is still in the beta phase, but can already be used in the Bitcoin main net (main network). The company recommends that users only send small amounts, as it is still a trial period.

In the near future, we will see the first applications where transactions are already taking place in the Lightning network. Already there is a startup from San Francisco, that would like to sell ice cream in the city, but the ice can only be paid for via the Bitcoin Lightning network. Given the cost of the ice cream, the risk here is certainly manageable.

In addition to Bitcoin, the Lightning network can also be used for Litecoin. So there we will soon see more applications.

The implementation of atomic swaps is also planned for the future. I could theoretically send bitcoins to someone and he would receive litecoins, assuming he wants that.