Bitcoin Forum
October 23, 2018, 03:04:26 PM *
News: Make sure you are not using versions of Bitcoin Core other than 0.17.0 [Torrent], 0.16.3, 0.15.2, or 0.14.3. More info.
 
   Home   Help Search Donate Login Register  
Pages: [1]
  Print  
Author Topic: A Brief on The lightning network  (Read 24 times)
ice guy john
Newbie
*
Offline Offline

Activity: 11
Merit: 0


View Profile
May 21, 2018, 11:34:32 AM
 #1

So thought i would put up a small explainer on what the lightning network is, hopefully it could helpful for even a few people here.

So at its very basic it acts as a second layer (or a second network on top of the btc chain). The concept was based on a 2015 white paper by Thaddeus Dryja and Joseph Poon.
 Link here (https://www.weusecoins.com/assets/pdf/library/Lightning%20Network%20Whitepaper.pdf)

The main purpose was to help solve issues of  scalability and lower transaction costs without compromising on the decentralized nature of Bitcoin.

Broadly it acts a second layer payment channel where users(nodes) can open up a channels between each other and than use these channels to send and receive payments securely , cheaply and trustleslly.

In order to actually use it, the parties that want to use would have to set up a multi sig wallet and deposit some bitcoin in it, this adress would than be stored on the blockchain and the two parties could use it to send an unlimited no of transactions to each other, with the data for these transactions being stored on that channel itself ( to indicate how much of the bitcoin belongs to each) rather than on the blockchain. And if at any point in time any one the parties on the channel wishes to close it they could use the most recently updated values on the channel to recover their share of the wallet.

Furthermore you  can also send payments to someone via channels with people that you are connected with, this means that you dont have to actually open a channel with each and every person you want to transact with.

All this in essence means that number of transactions on the bitcoin blockchain can be reduced by allowing for lower value transactions to be made on this second layer rather than the on chain network and allows for potentially unlimited micro transactions at low costs and helps solve the scalability issues of bitcoin.

Of course this is a very brief gist of what the lightning network entails
Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!