Lightning Network: is this solution needed?

08 MAY 2020 20:37

The operation of Lightning Network blockchain network has become the cause of heated debate and discussion in the past few months: part of the crypto community (defenders) is zealously protecting the network, another part (opponents) is finding its flaws. Representatives of Orion Exchange resource decided to examine the issue in detail.

Lightning Network: key points

The main idea of Lightning Network was to create a network for numerous microtransactions with a low commission in a short time. Such a network consists of several payment channels, ensuring cryptocurrency transfers between users.

The main reason for the creation and subsequent launch of Lightning Network, in the opinion of analysts, was insufficient scalability, low transaction speed, and an increased commission size compared to new cryptocurrency projects that appear on the market.

The new blockchain-network owed to solve the existing problems in bitcoin operations and to ensure fast cryptocurrency transfers even at small amounts.As well, Lightning Network allows increasing the anonymity of transactions and to return funds if one of the participants in the dealings is suspected of fraud.

To what extent is Lightning Network in demand nowadays?

Representatives of Long Hash company on the basis of the analysis found that the number of Liquid sidechain operations from Blockstream has recently increased compared to Lightning Network blockchain.That is because most users have an interest in cryptocurrency assets from a speculative point of view.And in this sense, sidechain allows traders to move the cryptocurrency faster.

In the view of a number of analysts, including Tony Weiss, the relatively low popularity of Lightning Network can also be explained by the fact that the first bitcoins remain reliable cryptocurrency also in our days and are quite capable to provide competition for modern altcoins.This explains the fact that the total volume of bitcoins in Liquid and payment channels of Lightning Network is several times lower in comparison with the scale of the entire network of the first Bitcoin cryptocurrency.

According to analyst Tony Weiss, transactions in the network of first bitcoins were always relatively quick and inexpensive, but over time, Lightning Network will definitely occupy a leading position due to the higher level of anonymity of cryptocurrency operations.In particular, one of the latest novelties from Lightning Labs developers has become a fundamentally new user data authentication system intended to replace traditional accounts with tokens.

On the basis of the opinions studied, one can conclude that the Lightning Network’s proposed solution, with its capabilities and prospects, is not yet so popular. However, in the coming years the trend should be reversed, and the new blockchain-network will be a key tool for cryptocurrency operations for millions of users.