Lightning Network and what does it mean
You may have heard of the term Lighting Network, but you don't know exactly what it means and how it can be used. It is still under development, but you can now read what it will allow you and what its benefits are. Simply put, you can send your Bitcoin payments through the Lightning Network. It is a very easy and relatively advanced solution that everyone can handle. But everything has a catch and Lightning Network is no exception.
Easy and understandable system
Today bitcoin transactions are not only slow but also relatively expensive. Sending Bitcoin over the Lightning Network is cheap and very fast, but almost everyone can handle it. Blockchain is a kind of ledger that contains all transactions and account balances. This made it possible to create the first functional decentralized cryptocurrency – Bitcoin. The classic payment via Lightning Network is most often made using QR codes. Lightning Network is available for iOS, Android, MS Windows and macOS. They offer not only a pleasant and simple user environment without unnecessary complications, but the most used ones are also in Czech.
Inefficient solution?
But it's not just that. At first, everything will be fine, because the transactions are fast, very cheap and everyone can download the entire blockchain to a computer. However, over time as the popularity and use of Bitcoin has grown, blockchain has proven to be a relatively slow and inefficient solution as a database. Blockchain stores all transactions that have ever taken place in a given cryptocurrency. This is a problem for a network that aims to become a global payment instrument with a huge number of transactions.
It will need to support multiple transactions
Payment channels outside the BTC blockchain have been talked about almost since the beginning of Bitcoin. Lightning Network is primarily a network scaling solution, but it's far from the only thing its Bitcoin implementation should help. Bitcoin will not be able to be used for efficient payments unless it supports many more transactions per second. Small transactions can be sent in Lightning Network too.
There are also certain risks
The Lightning Network also carries certain risks. In certain circumstances, such as when one of the parties to a channel is offline, the other party may attempt to close the channel unilaterally and appropriate part of the counterparty's funds without its consent. In the event that one party tries to deceive the other, Watchtower intervenes and punishes the unfair party by moving all resources in the channel to the other. After closing the payment channel, the final balance of accounts (approved by both parties) is recorded as a current transaction in the BTC blockchain. In the event of a dispute, one of the parties may close the channel unilaterally, in which case the last transaction approved by both parties will be entered in the blockchain.
