In the last couple months, the transaction fee on bitcoin network increased rapidly, over $30. But in 2018 we have an excellent solution that reduces the bitcoin transaction fee and offer great transaction/payment experience.
What actually is “Bitcoin Lightning Network”?
Bitcoin Lightning network is the latest system that is designed to receive/send payments instantly at very low transaction fees as compared to the main network. It helps bitcoin to be a friendly and useful currency for respective purposes.
How Does It Work?
It’s an excellent system that is built on bitcoin blockchain base that allows quick and cheap payments at low transaction fees. To these quick and cheap transactions, the following are the steps taken:
- There is a multiple signature wallet that store bitcoin amounts.
- The address of the wallet is saved to bitcoin blockchain along with a balance sheet to keep the records
- Once the payment channel is set up, the transaction can be made between two individuals without actually accessing the information stored on Bitcoin Blockchain.
- Both the individuals involved in the transaction have to sign an updated balance sheet to keep the official record of transactions.
- The balance sheet, the updated one, is not kept on the blockchain, both the individuals that participate in the transaction keeps the copy of this updated balance sheet.
- In case, if the payment channel gets closed or there is a dispute, both the individuals can use the latest and updated balance sheet to pay their share with respect to the multi-signed wallet.
You may find this whole process really complex, but there is no complexity when it’s about using this lightening network. This whole process works in the background automatically. The end user rarely has to put some extra efforts.
The lightning network allows the user to proceed with the transaction directly, rather than broadcasting their business to the world. Also, the payment records help individuals to track payments by themselves and thus time-consuming and expensive communication on blockchain is prevented.
– Instant Payment Settlements:
The payment settlement is really instant with the lightning network. You can expect your payment to be delivered within seconds.
– It’s Safe And Secure:
Lightning network offer extremely secured transaction platform to its users. Even the transaction is not actually stored on the blockchain, it’s just when there a dispute or payment channel is closed, both the respective parties get paid through blockchain.
– Even Tiny Payments are Possible:
You must know that since the transaction fee is directly proportional to the amount of payment, you are allowed to pay even a fraction of a cent.
When Will It Be Launched?
Presently, the official development team is implementing the proof of concept on bitcoin testing. That’s, everyone can give it a try and even set up your personal lightning node. There is no official announcement made about its launch. However, you can expect it to get launched anytime soon in 2018.
So, these are the facts and information that you should know about the bitcoin lightning network. Hope you like the content and it has exposed everything to you.