To achieve higher scalability of the network erutamiento of bitcoins Lightning Network is one of the challenges that confronts the community of this ecosystem. In particular, in terms of its limitations in order to manage the liquidity in the payment channels. A proposal called the Hyperloop aims to solve the rebalancing of the pay channels in Ligtning Network.The project Hyperloop, a concept created by Alex Bosworth, and Bryan Vu, two developers of Lightnig Labs, comes to complement a package of technologies called Lightning Loop, which address some aspects of the flow of funds into the channels of the network Lightning.Hyperloop was conceived by its developers as a way to minimize the costs associated with the exchanges submarines (submarine swaps) in the Lightning Loop. This concept was presented in may of this year, during the event Magical Crypto Conference 2019, in New York.Alex Bosworth explained the functioning of the Lightning Loop and the concept of the Hyperloop in a conference, in may of this year. Source: @fulmolightning / Twitter.At that time, Bosworth explained that Lightning Network is a network complementary to the network of Bitcoin, which means that each one has its advantages and disadvantages. Therefore, he believes that it is necessary to take the best advantage of the features of each side, to make the system highly effective when it comes to transfer value.In this sense, Bosworth believes that the proposed Hyperloop, still in a conceptual phase, and Lightning Loop, already in production in alpha version for developers, are steps in the right direction to “solve some problems in basic economic liquidity in Lightning,” he said in a tweet in June 2019.
With the release of Loop In, we’re a lot closer to fixing some basic liquidity economic problems in Lightning. With the HyperLoop project the attention will turn back to super-power these swaps using the tools we have at hand now and the new tools coming to Bitcoin in the near term. pic.twitter.com/AlQyUS5aIb— Alex Bosworth ☇ (@alexbosworth) June 26, 2019
“With the project HyperLoop, the attention will become superpower these swaps, using the tools that we have at hand and new tools that will come to Bitcoin in the short term,” reads the publication of Bosworth.
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The problem of liquidity in Lightning Network
Lightning Network works through the establishment of channels of payment between the two parties, which allows them to perform transactions between themselves off chain blocks (off-chain) of Bitcoin. However, these channels have a specific capacity of bitcoins is defined by a transaction of funding at the time of creating the channel.This implies that the ability to trade on the network of micro-payments is contingent on the current state of the channel of payment. To be found at the top and no longer be able to receive more payments, or the funds are insufficient, the transaction in Lightning could fail.One of the limitations of most obvious channels of payment at Lightning Network consists of that are not rechargeable. That is to say, if Alice and Bob open up a channel of payment, and Alice depleted the balance of your wallet, the current design of the network will not allow you to accredit new balance. To make any further payments to Bob, Alice will have to close your channel and open a new one, assuming the corresponding costs in time and fees.
Lightning Loop as the basis of Hyperloop
To give an answer to the scenario described above, Bosworth and Vu developed Lightning Loop, a service without custody that allows you to add and remove balance of payment channels in Lightning Netwok. The solution, released in alpha version in march of this year, consists of two modules (input and output), referred to as Loop in and Loop out.These establish a bridge or link between the blockchain of Bitcoin (on-chain) and Lightning Network (off-chain), which allows users to transfer funds to and from the chain of blocks. In this way the payment channels you can replenish or release of balance according to your need. The transfer of funds is accomplished using the technology of the submarine swaps.Despite the fact that this solution allows you to rebalance the flow of funds in the channels, the exchanges occur directly in the chain of blocks with the consequent payment of commission of transaction. “It is a heavy operation, is not just a transaction, there are multiple transactions and multiple outputs, which makes this expensive,” explained Bosworth. It is there where it arises Hyperloop, as a formula to make them more efficient these exchanges.
Transactions cooperatives in Hyperloop
Essentially, Hyperloop proposes to group a batch of transactions from exchanges submarines in a single transaction by cooperative, using a methodology known as “agglomeration of firms” (signature aggregation). In this way, the users would pay only a fraction of the commission’s network, to transfer funds from the string, towards its channels of payment out of the chain.
With the agglomeration of firms, if we can get a group of people together to sign cooperatively, you can take the normal cost of the signature to move funds in the chain, all the parties that are in the string, to a single firm. I don’t think there’s any limitation to that.Alex Bosworth, a developer of Lightning Labs
Bosworth explained that the process would involve creating a channel configuration temporary to make the exchange, deposit that would be made using the protocol multisig (signatures multiple). “We signed all transactions as if we were to string, but then replaced them by a transaction, a cooperative that ignores the HTLC that live in the chain,” said the developer. “We are working on the combination of signatures multisig for many people to combine their signatures into a single signature”.Once you have created the transaction co-op, an event is generated through Lightning Loop for sending or receiving the funds on the pay channel. In the opinion of Bosworth, the proposal Hayperloop also benefit from the protocol AMP (Atomic Multipath Payments), which is responsible for combining the balances of multiple channels of payment.Hyperloop would add or subtract capacity to pay-per-view without closing them. Source: Lightning Labs.Another advantage of Hyperloop is that the outputs of the transaction will be very small, of about 30 bytes, as calculated by the creators of the project. This implies a saving of 10 times the space that is used in an exchange, which will allow to add up to 1,000 people in a single transaction.The developer, Jameson Lopp, CTO of the startup House, a maker of nodes preconfigured Lightning Network, said in an interview that Hyperloop “offers a new route to handle the liquidity” in the network of routing bitcoins. However, skeptical with respect to how this idea may take hold in the non-expert users.
I think the big question is how we use this technology (Hyperloop), how do we make this technology easier for someone who just likes to click a button and have everything done in advance. Because if you require people to move out to find a liquidity provider in any part, and give the type the method to perform exchanges of equal to equal, that’s not going to be a friendly user experience.Jameson Lopp, CTO of House
Apparently, Lopp is of those who believe that to achieve the cooperation of many parties over a short period of time, even to reduce significantly transaction costs, will be no easy task. However, Brosworth believes that the system will be able to “rebalance up to 2 billion people a year,” and may be implemented without bifurcations or changes in the rules of Lightning. Until now it has only been given to understanding the concept of the Hyperloop, so there will be that to wait for the release of the software.