What is the Lightning Network?

A large part of the blockchain of cryptocurrencies are quite slow, so that those who use them to make payments, they are having to wait significant periods of time to complete a simple transaction. The Lightning Network, or Network of channels of payment may be the ultimate solution to this problem. Once that starts the process of transaction in a chain of blocks, you must complete certain steps, among them the payment of a commission. The same is set to the liking of the user, but it is the miner who decides which transaction to do first, prioritizing the best commission when the network is saturated. So, if the amount of commission you are willing to pay the user is under the transaction will be slow, but it proposes a commission high, the interest on the part of the miner grows and will be done in a very short span of time; however this is not entirely so, it may be that in a normal situation, an economic transaction is performed quickly. In such a way that the waiting time will depend on the amount of the commission that it is willing to pay for the transaction, generally.

How it works a Blockchain

Let’s explain the process from the blockchain of Bitcoin, where to perform the validation of a block, must be met with certain steps to ensure that the parties are in agreement with the contents of the block. The entire process takes about 10 minutes and when you send 1 BTC or 100 BTC, it will be the same. Each transaction is composed by the information of who generates the order, and the one who receives it, the amount of the transaction and its rate of processing. So a higher rate creates an incentive for a miner to include the transaction in the shortest possible time. As there is not a set-up fee is entirely at the discretion of the user, this is the one that decides how much you are willing to pay for the service. Thus, the queue of transactions to process is moved to the first places, depending on the fare that the user pays for the transaction.

Function of the Lightning Network

The main function of the Lightning Network is to speed up the procedure of transactions between users of a blockchain. In other words, its task is to function as a tool for improving the scalability of the blockchain. In the case of Bitcoin, specifically, the Lightning Network could take him to the top of the scale and keep it at the head of the of the cryptocurrencies in the race for the massification of the criptoactivos. Lightning Network runs a protocol developed to provide more stability to the Bitcoin, working as a second layer on top of its blockchain. This allows the criptomoneda to perform movements which the nature of its chain of blocks is not permitted, specifically, those transactions instant and at a very low cost. Bitcoin can barely get to solve between 7 and 8 transactions per second, which seriously compromises its scalability and adoption. For this reason, you can still be seen as an expensive and slow.

How it works the Lightning Network

To understand its operation let’s start by getting to know three essential characteristics of the Lightning Network: instant Payments: this is possible thanks to the contracts smart that allow the transfer of cryptocurrencies without the worry of the times of confirmation.Scalability: this is possible because the Lightning Network are capable of processing millions, if not billions of transactions per second out of the blockchain, strengthening the criptomoneda.Micropayments: usually to send USD 0,10’d have to pay a fee higher than the amount of the shipping. With the Lightning Network can be made these micropayments and prevents that this option disappears from the ecosystem. It is not by chance that the Lightning Network to solve the three aspects most criticized of Bitcoin. But let’s see how it resolves.

Network of payment channels

The payment channels are the basis of the Lightning Network, where two parties originate a transaction multifirma, where at least one send funds. Each of the parties has a key for private access and the transaction will be effective if both parties sign the transaction with their keys. The registration and opening of the canal can last for about 10 minutes, but the following transactions between the parties will be snapshots. This is because the parties have funds stored in the channel. For transactions that are made within the blockchain of Bitcoin, it is necessary that they may be issued and will include the blocks mined, while in the channels of payment, the transactions are not issued, but when the parties decide that the channel will cease.

How to use Lightning Network

If you are wondering how to use the Lightning Network, the following example will be of great help. Peter and John decide to create a channel of payment through a Lightning Network, where Peter placed USD 20 and John 10 USD. What the Lightning Network does is that it takes the pay-per-view, and develops a network using contracts smart that ensure the functioning decentralized network. Here is carry out instant payments between Peter and John. But what happens if Peter wants to pay to Luis and it is not on its pay channel but in that of John. Because Peter will have the possibility of sending John the amount that you need to transfer to Luis and it will do so from the contract smartphone that keeps up with Luis. The same thing will happen with 4 participants in another network of payment channels. The confidence in the Lightning Network is that the funds sent by your participant to another will be exactly the same as they were sent. To do so, will loose instantly. Exactly so it will work on all the strings that follow. If you needed an explanation of the Lightning Network in Bitcoin or Litecoin, I hope I have answered your question in the previous paragraphs.

How to install a node of the Lightning Network?

If what you need is to know the installation and configuration of nodes of the Lightning Network, thinking about getting rewards, profits, fees or commissions, I invite you to continue this publication; for the explanation of this topic would take us an entire article.

Map of nodes of Lightning Network

Using the browser tool of nodes ACINQ you’ll be able to visualize the entire network in real-time of the Lightning Network.

Wallet for Lightning Network

A wallet that is compatible with Lightning Network must comply with the requirements that require this protocol. Currently, one of the best is the portfolio for this design blockchain, is designed by Jack Mallers, who goes by the name Zap. Also specialised for Lightning is developed by the same group that keeps alive the explorer nodes ACINQ, known as Eclair wallet. The following two tabs change content below. Creative editor and trader of cryptocurrencies, currencies, fiat, and commodities.

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