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- At any time there are over 2,000 thunderstorms occurring worldwide, each producing over a 100 lightning strikes a second. That’s over 8 million lightning bolts every day.
- Each lightning flash is about 3 miles long but only about a centimeter wide.
- A lightning strike discharges about 1–10 billion joules of energy and produces a current of 30,000–50,000 amps.
- A single lightning bolt unleashes as much energy as blowing up 1,000 Kilos of TNT.
This is lightning at 7000 frames per second. Only the bright flash in the end is visible to the naked eye. Do you see how it looks like a network?
Oh wait, I’m supposed to be talking about a different kind of Lightning — The Bitcoin kind.
The Lightning Network
What is the Lightning Network anyway? Simply put, the Lightning Network is a proposed solution to the problem of making the Bitcoin network scale to global capacity while still maintaining decentralization and keeping it trust-free. It’s a second-layer solution on top of the Bitcoin network, secured by the Bitcoin Blockchain. It is open-source software, just like Bitcoin, and anyone can scrutinize, criticize, improve, and contribute to the code.
There is simply no reason for anyone serious in the Bitcoin industry to still be ignorant about the network’s capability to scale on-chain. To want your micro “coffee” transaction to be recorded on the world’s most secure global public ledger on tens of thousands of computers for all eternity seems a bit absurd — it is practically impossible. Let’s face it, Bitcoin transactions were never instant and free, and the problems we faced recently have long been predicted to happen. The network is voluntary, so anyone is free to come up with a solution for this problem. Some of the best software engineers in the world have done just that, and have been testing it extensively and are ready to take the technology to the next level. That’s the Lightning Network.
For the more technically inclined, Melik Manukyan elegantly used TCP/IP as an analogy in his excellent medium piece:
“Lightning enables unicast transactions in a system [Bitcoin] that previously only supported broadcast transactions. To me, Lightning nodes in Bitcoin are the equivalent of IP hosts — where we can finally conduct or route one-to-one or point-to-point transactions to their appropriate recipients.
In traditional IP, we send and receive data packets; in Lightning, we send and receive Bitcoin. IP is what allowed us to scale our small and largely primitive networks of the past into the global giant that it is today, the Internet. In a similar manner, Lightning is what will allow us to scale our global Bitcoin network.
Where Lightning Nodes can be seen as IP hosts, I view Lightning Channels as established TCP connections. In Lightning, we establish channels with our respective parties and are able to directly [point-to-point] send and receive data (transactions) similarly to TCP. Where Blockchain is similar to Ethernet, Lightning Nodes are our IPs and Lightning Channels our TCP connections.”
Lightning facts:
- Lightning is capable of millions of transactions per second and will blow away any legacy payment rail or existing blockchain implementation out there, while still enjoying the benefits of the Bitcoin Blockchain’s security.
- A single lightning transaction will cost fractions of a penny. This will enable payments per click/ like/ interaction online, without an intermediary.
- There is no better implementation out there that can scale Bitcoin to 1000-times its current capacity and still maintain decentralization, with instant transactions at near zero cost, without needing trusted-third parties, and in such a short span of time. There are others that make this claim, but none of them will stand up to the most rigorous testing and peer-review in the world that Lightning has gone through so far.
- Security is enforced by blockchain smart-contracts without creating a on-blockchain transaction for individual payments. Payment speed measured in milliseconds to seconds.
- Lightning is centralized… and by centralized I mean centralized on one planet, Earth. Kidding aside, the Lightning network itself is totally decentralized. If anyone tells you otherwise, show them this image of the different types of networks:
And then this image of the now 100+ and growing mainnet lightning nodes:
and this image of the Testnet version with 1500 nodes and 2900 channels.
Does that look centralized to you?
- On the Lightning Testnet, a user was connected to 1 node and can see 1016 out of 1071 nodes in the network. He had access to 3577 out of 3584 channels. So with just one active channel, he could pay almost anyone on the network!
- Lighting payments are much more private than payments on the main Bitcoin blockchain because network participants will not know the sender and recipient.
- Lighting network will be able to accommodate “dust” transactions (amounts too small to transact on the main chain) and possibly, sub-satoshi transactions in the future.
- The number of payments per second that can be routed over the lightning network has no practical upper boundaries. Global commerce transaction capacity is truly possible. We are talking in the billions of transactions on a daily basis.
- Lightning Network enables Unicast Transactions in Bitcoin. Lightning is Bitcoin’s TCP/IP stack.
- Transact with other blockchains! Cross-chain atomic swaps can occur off-chain instantly. So long as the chains can support the same cryptographic hash function, it is possible to make transactions across different blockchains with no intermediary.
“But it’s off-chain!” says some critics. Well, according to Forbes, on-chain global Bitcoin transactions are around $2 Billion a day. A big number, yes, but off-chain transaction (exchanges, wallets, others) are roughly estimated at around $30 Billion a day, but the real number is probably much higher. This can all be done on the Lightning Network, eliminating exchange counter-party risk and even allowing near-instant and cheap inter-exchange deposit and withdrawal transactions. All the current off-chain transactions can be moved to Lightning, and it will be safer, faster, and cheaper, and in the end, it will all be recorded on the Bitcoin blockchain anyway, anytime the user wants.
Testing, Development, Implementation
There are three implementations of Lightning, eclair, c-lightning, and lnd, all open-source, and all interoperable.
In January 21st, 2018, the first physical item was purchased on the Lightning network. It was a VPN router, how appropriate!
As of this writing, there was about $9,500 in value that was live on the Lightning network Mainnet, and one day we’ll look back and say “Remember when the Lightning network had less than $10,000 on it?” It’s a bit reckless given that the software is still in testing stage and the people who volunteered to test it can potentially lose money, but these volunteer testers don’t seem to care. It’s for science!
So when will the Lightning Network be rolled out, you ask? To quote Jameson Lopp, Bitgo Engineer and Cypherpunk extraordinaire,
“The rollout has already begun. This is an iterative distributed learning process; it’s unlikely there will be a single point in time at which we say LN is “deployed” because it will grow organically. Software is never finished.”
Everyone today is focused on Blockchain technology, ICOs, Tokens, and all things crypto, but it’s the Lightning Network that is a true game-changer. It’s the layer on which new protocols and mainstream applications will be built, on which everyone will transact, where the killer app for Bitcoin will finally emerge. The Bitcoin blockchain will scale alongside Lightning, providing the immutable, trustless, secure, and censorship-resistant foundation that will have the final say on the legitimacy of every transaction we make.
What an exciting time to be involved in the Bitcoin industry and to watch these engineers build solutions like Lightning in real-time. Imagine a world where money flows as freely as information does on the internet? It’s happening. Hold on to your hats everyone, the future is here.
Lightning will strike, and it will strike faster than a blink of an eye.
Struck By Lightning— Bitcoin’s True ‘Killer App’ was originally published in Decentralize Today on Medium, where people are continuing the conversation by highlighting and responding to this story.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.