What happens to Bitcoin after implementing Lightning Network and NFC

What is Lighting Network?

As explained by Elizabeth Stark, co-founder of Lightning Labs:

"Lightning Network is a protocol developed for Bitcoin blockchain's higher scalability and acceleration. It was designed to resolve some of Bitcoin's technical limitations, but also to be implemented in any blockchain. "

As we know, Bitcoin's current implementation allows for only seven transactions per second, while for instance Visa up to 50,000. The Lightning Network is presented as a potential Bitcoin scalability solution for millions of transactions per second and a significant reduction in transaction charges.
How does it work?

The Lightning Network works in such a way that transactions are performed off-block (Off-chain). If two parties want to make a transaction, a so-called payment channel opens. Everyone has their private key and the channel opens only after signing on both sides. Consequently, they can perform transactions on this channel. Once a channel has been closed, anyone who has sent them is credited and the overall result is written into the blockchain.

Elizabeth Stark explains that Lightning Network is a technology that creates a network of these channels with Smart Contracts and ensures network operation in a decentralized form, without risk to counterparties.

Practical example

For example, Alica can open a channel with Bob, who has a channel with Jana and she and David. If Alice wants to cooperate with David, she can send funds through Bob and Jane, and David finally gets them. On the basis of the chain of bilateral signatures and Smart Contracts, Alica does not have to trust Bob and Jane as an intermediary - the cryptographic protocol will ensure that funds either reach David through Bob and Jane or will be automatically returned to Alice. Communication between subscribers is provided by so-called network nodes.
Lightning Network is already running in beta

The beta version of the Lightning Network was launched on March 15 on Bitcoin Mainnet, but with considerable limitations. People can now send cryptomas for about $ 1400 per channel, or about $ 400 per payment. The target group of this step are developers and advanced users who can run a full node.

The launch of the beta version also has its critics, who are afraid that the launch took place without thorough testing.

The benefits of the Lightning Network

Acceleration of transactions. Transactions after the opening of the trading channel are running almost immediately.
Reducing fee rates. Transactions are running in the channel for zero fees, and after the channel is closed, the overall result is written into the block.
Enable microplates. Low fees and transaction speeds make small payments, like a thousand Satoshi.
Increasing anonymity. In blockchaine, not all transactions are stored, but only transaction result.

It also has drawbacks

Increase centralization. The nodes needed to operate the LN are a step towards centralization.
Fees. The Lightning Network does not charge fees completely. At the blockchain level, they are lowered with certainty, but they also bring their own. Knots must be profitable, otherwise nobody would do it. And the question is how bitcoin will respond, because significant cuts in fees can cause them big problems.
The network is running online. This gives the hacker a greater chance of hacking into the system.
Possible outages. Node failure could cause network disruption and could cause many users to have their funds frozen for a certain period of time.

NFC + Lightning - New Perspectives

Developers are constantly working to simplify the payment system, with one recently submitting a proposal to link Lightning with a payment technology that could fill futuristic visions for Bitcoin payments.

This technology could become Near-Field Communication (NFC). NFC is not new, payments based on this technology via smartphones or smart cards work in Asia and Europe.
Standardization as a way

The proposal submitted by Igor Cota is an attempt to create standards for connecting Lightning to the NFC. The main idea is to get NFC into standards (BOLTS) that are used by Lightning Network Developers so that all implementations are mutually compatible.

Quote believes that the currently used BOLT11 should be added to a bit cumbersome QR code and NFC. Quota has already come up with its design under the name Multipurpose Internet Mail Extensions (MIME). The feedback from the technical public is generally positive, even though there have been isolated objections that it is standardization early.

Such standardization would allow for rapid and user-friendly cryptoplatges. In addition, it would increase the amount and quality of data the user could get about their business. This would allow them to be crippled accepted by the general public as a regular sale.

conclusion

We see that developments around Bitcoin and other cryptos are advancing at high speed. Developers are constantly working on improvements, and whether they are succeeding in the Lightning Network along with NFS or other implementations, we think that in a not too long horizon we will find such comfortable crypt payments as Igor Cota poses.

Thank you very much for your support!