Our devs have successfully brought to life all the core functions for a BTG-based implementation of Lightning Network, based on LND (the Lightning Network Daemon) from Lightning Labs. This release provides a Technical Preview version that other developers can test and experiment with.
What is Lightning Network?It’s a brilliant way to create super-fast, micro-cost BTG payments with virtually no limits to the transactions per second or the number of users.
Lightning Network payments take place through payment channels directly between users, without waiting for blocks on the blockchain, so they are instantaneous. At the same time, the payments are reliable and trustable because of the way those payment channels are created and funded: with smart contracts on the blockchain.
Because Lightning Network depends on a Segwit-enabled blockchain (like the BTG blockchain) as a base layer where the channels can be created, it’s often called a “second layer solution.”
The last piece of the puzzle? Routing:
On the Lightning Network, two people don’t need a direct channel to send money to each other because the payment can travel across many peoples’ channels. As long as there’s a path between people, the network can route the funds between them. The payment “hops” through channels between multiple people to reach the recipient, and clever cryptography within the Lightning Network payment system ensures that nobody in the chain gets paid unless everybody in the chain gets paid. And since each individual transfer is instantaneous, the entire chain of payments can be completed in a moment!
This code is backed by solid engineering, but the combined effect is somewhat magical. Channels between nodes are secure and trusted because they’re based on coins and contracts on the base-layer blockchain. Meanwhile, payments across those channels in the second-layer Lightning Network happen instantly, without waiting for the blockchain, by flowing through those pre-established channels.
So Lightning Network is super-fast – but how is it micro-cost?The cost of opening or closing a channel is based on the cost of transactions on the blockchain – every new channel puts activity on the underlying blockchain, which incurs a fee. But, once a channel is opened, it can be used for thousands of payments without touching the blockchain again, so none of the payments incur that cost. Each Lightning Network payment includes a tiny, tiny fee which is paid to the node that relays a payment. The tiny fee is so small it’s almost negligible, but it gives people an incentive to allow their nodes to serve as relays, and it also prevent spamming (if transactions were completely free, someone could write bots to just push massive number of tiny payments to try to cause trouble.)
What does all this mean? Satisfy your curiosity by reading the next part of this article posted on our user-friendly BTG Forum:https://forum.bitcoingold.org/t/lightning-network-technical-preview/1866
