Bitcoin Lightning Network Simply Explained

in #bitcoin5 years ago

Lightning Network! 

For most people interested in development of cryptocurrency economy and other blockchain-based systems, the top most Lightning Network is a "second layer" payment protocol that operates on top of a blockchain (most commonly Bitcoin). It features a peer-to-peer system for making micropayments of digital cryptocurrency through a network of bidirectional payment channels without delegating custody of funds. Routing through an idealized mesh network of payment channels.  

Lightning is a decentralized network using smart contract functionality in the blockchain to enable instant payments across a network of participants. It works by using real Bitcoin/blockchain transactions and using its native smart-contract scripting language, it is possible to create a secure network of participants which are able to transact at high volume and high speed.  

The specification for the commercial varieties of the lightning network is available on Github, and its largest contributor is Rusty Russell of Blockstream. On March 20, 2018 Lightning Network nodes faced a Distributed Denial of Service (DDoS) attack that sent around 200 nodes offline, down from around 1,050 to 870. The exploit used as many node connections as possible to prevent any new connections.  

To be able to construct secure transfers using a network of channels across multiple hops to the final destination requires an additional construction, a Hashed Timelock Contract (HTLC). 

Lightning Network Work 

As we made very simple steps for all,

1. Customer and Merchant creates the Payment processors/channel. 

2. As the transaction completes the Balance sheet is produces which is stored in the payment processor blockchain. 

3. New transaction begins the new balance sheet is produced but the previous balance sheet is disappeared. 

4. If other customer is added then no need to create another payment/channel, it can excess through first customer payment/channel only. This is advantage which reduced lot of time. 

5. Transaction time is 7sec major advantage in blockchain.  


Due to the nature of the Lightning Network's dispute mechanism which requires all users to watch the blockchain constantly for fraud, the concept of a "watchtower" has been developed, where trust can be outsourced to watchtower nodes to monitor for fraud.  


The primary risks relate to timelock expiration. Additionally, for core nodes and possibly some merchants to be able to route funds, the keys must be held online for lower latency. However, end-users and nodes are able to keep their private keys firewalled off in cold storage.  

Transactions for the Future 

Instant Payments: Lightning-fast blockchain payments without worrying about block confirmation times. Security is enforced by blockchain smart-contracts without creating a on-blockchain transaction for individual payments. Payment speed measured in milliseconds to seconds. 

Scalability: Capable of millions to billions of transactions per second across the network. Capacity blows away legacy payment rails by many orders of magnitude. Attaching payment per action/click is now possible without custodians. 

Low Cost: By transacting and settling off-blockchain, the Lightning Network allows for exceptionally low fees, which allows for emerging use cases such as instant micropayments. 

Cross Blockchains: Cross-chain atomic swaps can occur off-chain instantly with heterogeneous blockchain consensus rules. So long as the chains can support the same cryptographic hash function, it is possible to make transactions across blockchains without trust in 3rd party custodians.   

Regards, @majestyman 


@majestyman Great information my friend. Keep posting informative information like this.

@flash07 For supporting and encouraging us. Thanks so much friend
We will post always an quality information which help others.

Very accurate explanation. I hope these atomic swaps are coming soon. Will be an interesting technology.

@cryptographix A huge difference will be their after these technology and most awaiting technology. .. Thanks for your compliment👍👍

Perfect explanation @majestyman

Just checked your profile just to realize that we seem to share a number of interests :)

In particular that we both share a similar passion towards cryptocurrencies and blockchain technology :)

big fat upvote on the way! :)

I will follow you closely :)
Take care, Piotr

First of all Thanks so much for having a look of our profile @crypto.piotr
It means a lot to us.. Exactly sir if we share no.of interests together, it will be glad for us.
For following us closely .... Thanks
Really it means a lot for us... We will follow you sir and share interests.

hi @majestyman

you're very responsive which is absolutely great and steemit community surely will benefit by having you here.

if you would ever like to keep in touch and support each other closer, then drop me a message [email protected]. This will allow us to communicate easier.

No pressure of course,

Cheers, Piotr

@crypto.piotr Thanks for your support.
This much suggestions and help towards us that means a lot..
If need any help then we will contact you sir👍

You keep replying as "we" :) Interesing @majestyman :)

keep in touch

Nothing to misunderstand, @crypto.piotr
We will be always in touch👍
Thanks so much for everything

Congratulations @majestyman! You have completed the following achievement on Steemit and have been rewarded with new badge(s) :

Award for the number of upvotes

Click on the badge to view your Board of Honor.
If you no longer want to receive notifications, reply to this comment with the word STOP

To support your work, I also upvoted your post!

Do not miss the last post from @steemitboard:
SteemitBoard World Cup Contest - The results, the winners and the prizes

Do you like SteemitBoard's project? Then Vote for its witness and get one more award!

Follow 👍 comment

Can I invest in btc

@tarikkazi Yes bro..
Just a day back btc value raised up, first understand the btc market then invest in it.👍

Very soon The lightning network shall be adopted by almost everyone.

@kwabeedat Exactly once it will success then it will be compulsory to adopt by everyone👍

Hi, I am Sohag form Bangladesh. I am new on Steemit or Your Community.

Please read the post: The Amazing Software For Your HDD

I have given you an upvote. Please, you also give me upvote.

@mdsohagm752 Ok bro.. Always their for support ..

Coin Marketplace

STEEM 0.26
TRX 0.11
JST 0.032
BTC 43967.87
ETH 2264.52
USDT 1.00
SBD 5.07