When Strike wallet teamed up with Blackhawk, Shopify, and NCR, it led to something significant. It led to numerous stores, such as McDonald’s, Walmart, etc., declaring that they would accept Bitcoin through the Lightning Network. The https://nft-era.io/ platform is also accepted in some stores mentioned, this idea is to confront and overcome the challenges of accepting Bitcoin as payment for goods and services.
The Lightning Network
The initiators of this Network were Thaddeus Dryja and Joseph Poon. A team began developing the Lightning Network in 2015. The aim was to make the transaction time and throughput of Bitcoin, more efficacious and speedier.
The Lightning Network refers to a second layer technology. The technology is connected to Bitcoin. The idea was to scale the Bitcoin blockchain via micropayment channels, such that it would become capable of conducting rapid transactions. With this Network in place, users should discover three benefits – speedy operations, affordable charges, and ready confirmation of transactions. Everything would be different from the operations witnessed on the Bitcoin blockchain.
Furthermore, the main Bitcoin blockchain is prone to traffic congestion. However, if the Lightning Networks takes away a major chunk of the operations, the blockchain should experience de-congestion. In turn, the associated transaction fees would also reduce.
The Lightning Network is also capable of conducting other types of transactions. They are off-chain exchanges that involve varied cryptocurrencies. To illustrate, there are atomic swaps. Here, one digital currency may be exchanged for another, without the interference of a third party. An example of a third party is a digital currency exchange.
Functioning of the Lightning Network
Suppose, you wish to create a link with your regular coffee shop. You offer the shop a Bitcoin deposit worth $100, to keep in touch. Thus, there is an instant communication pathway established between the coffee shop and you.
Now, a friend of yours, or even someone unknown, establishes links with a grocery store, and a coffee shop. In other words, a connection between your friend/stranger, the coffee shop, and the grocery store, and you, have come to the fore. Therefore, if you have any Bitcoin left over, you may use it to purchase goods from the grocery store too. Similarly, the stranger/friend may use his/her Bitcoin balance to purchase products from the coffee shop.
Thus, you need not have separate channels to buy things. Only if you close your account, or your friend/the stranger closes his/her account, will there be a change. Thanks to the Lightning Network, you become involved in the web. You have the enjoyment of routing between multiple lighting nodes. Best of all, everything takes place on a decentralized platform. How do you explain the same at a technical level?
The initial deposit is the funding transaction. When you set up a communication pathway or channel in a lightning node, you exchange a lone key with the owner of the shop/grocery store (in this case). The key suffices to validate your spending. The expended funds are the commitment transactions. Since there is a single key, it is not possible for the main Bitcoin blockchain to recognize your funding/spending transactions.
The primary keys are exchanged between both parties once again, only if the channel between them undergoes a closure.
Benefits of the Lightning Network
Merchants must pay fees for the usage of debit/credit cards. Here, the Bitcoin Lightning Network does not charge the merchants for accepting payments. Even the users should find the usage of this Network inexpensive, and highly speedy. The Network should become popular soon, for big names are highlighting it.
Similarly, the Lightning Network takes recourse to the base technology of blockchains. Therefore, it becomes possible to have a secure platform in place.
Users may expect high-speed and high-volume transactions from it. They should have no worries, for they will leverage authentic blockchain/Bitcoin transactions. The speed of every transaction is measurable
Another attraction is the usage of the native smart-contract programming language.
Since there is no waiting period for confirming a transaction, it tends to go through very quickly. The speed of every transaction is measurable in milliseconds or a second. The Lightning Network displays high scalability. Therefore, it is possible to view as many as a billion transactions every second.
The blockchain’s smart contracts suffice to keep every transaction safe from cybercriminals.
Masab Farooque is a Tech Geek, Writer, and Founder at The Panther Tech. He is also a lead game developer at 10StaticStudios.
When he is not writing, he is mostly playing video games