WHAT YOU NEED TO KNOW ABOUT LIGHTNING NETWORK

The Lightning Network is legal outside the blockchain that helps keep transactions recorded for Bitcoin and it was built to keep Bitcoin gas fees low and faster. We can be called it a layer 2 scaling solution for the Bitcoin blockchain. To give you a better understanding, I will like to discuss a little about Bitcoin. You should know that the Bitcoin blockchain saw designed to only process 7 transactions for seconds and this makes the network very congested and makes the transaction fees very high because people will have to bid before their transaction is processed. There is a big difference when we compare the amount of transactions Bitcoin can process per second to what Visa can process per second. Bitcoin process 7 transactions per second while Visa can process 50,000 transactions per second. No doubt that Visa transaction speed is one of the main reasons why many businesses use it.

Let me explain more about how the Lightning Network works. The first explanation is, assuming you go out with your friend to have a good time, and you bought a drink worth $5 and you paid for it in Bitcoin and the Bitcoin transaction fee was $15. You bought the drink 5 times and every time you bought the drink, you paid the transaction fee each you paid. That means you would pay $75 for the transaction fee while the total amount of your drink would be $25. Your transaction fee was way high than the drinks you bought. Now, you are smarter, you came back some day later with the same drink but this time you to the cashier to record the drink you bought so that you will pay for everything together. This example is how the lighting network processes its transaction.

The major idea of the Bitcoin lightning network is to prevent very high transaction fees and slow transaction fees. So, what the lighting network does is that you give them your Bitcoin and they will keep the record of the amount of Bitcoin you have you can receive your Bitcoin back whenever you need your real Bitcoin and they will assess their record and send you the amount of Bitcoin you have. This means you will only pay the network once and they will only pay you once. Basically, it is just you are some people depositing your asset into a certain wallet that has many signatures and this wallet is where you make all your payment. Because it is a payment channel, and many other people can send your payment back and forth. You can decide to square up that payment channel when you and others have done, you can decide to finalize the transaction.

You might be wondering that, if are you not going to be paying for creating a payment channel any time you want to use it. The way out of that is, you can the already available payment channel created by other people. For instance, you want to send yourself a friend payment for the service he rendered and both of you don't have a payment channel but two of you have a payment channel of Binance exchange. You can tell lighting Network to help you route your $50 payment to your friend Binance. Lighting Network is a great scaling solution because it can scale up to a million transactions.