Bitcoin’s Lightning Network

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Hello astronauts in this article, I want to tell you about the Lightning Network. Before I get into the subject, I want to give you some information about Bitcoin. Who was Bitcoin founded? , When was it founded? What was it founded for? And who are its developers? Let’s talk about them first.

What is Bitcoin?

Bitcoin (BTC) is a digital currency used and distributed electronically. Bitcoin is a decentralized system. It cannot be managed by a single person or Institutions. Bitcoin cannot be overproduced. There are a total of 21 million BTC.

Who created Bitcoin?

Bitcoin (BTC) was first produced by programmers and programmers named Satoshi Nakamoto in 2009 and was promoted as an open-source. There are many rumors about the creator of the Bitcoin Satoshi Nakamoto is still unknown. When Satoshi Nakamoto started to deal with different cryptos in 2010, he developed Gavin Andersen as the pioneer of Bitcoin.

Who controls Bitcoin?

For many people, the main advantage of Bitcoin was that it could function independently from Banks, Governments, and Companies. No organization can control Bitcoin transactions, make money cut fees and confiscate money. As a result, a completely transparent and secure system called Blockchain, in which all bitcoin transactions are written was created.

What are the features of Bitcoin?

1- FAST: While we can make our payments instantly thanks to bitcoin, when we try to do this through banks, we encounter a transaction length that can take days.

2- Transparent: All transactions made over Bitcoin are recorded in the Blockchain book and this information can be checked by other users.

3- Anonymous: While banks can easily access their customers’ credit card histories, addresses, and phone numbers, these features can be made secretly on the Bitcoin platform.

4- Irrevocable shipping: When you send money with Bitcoin, there is no way to get the money back if the person you sent wants to send it back to you. That’s why the person who sent you bitcoin cannot defraud you.

Many famous investors and businessmen say that Bitcoin will reach very high values ​​in the years ahead, even John McAffe has even said that Bitcoin will eat privacy portions in live broadcasts unless it is $ 500,000.

“hodling”, which is one of the most common strategic terms in the cryptocurrency, means holding the asset rather than selling it. The term Hodling derives from a drunken man saying “I am holding” instead of “I am hodling” in Bitcoin Forum in 2013.  Finally, if you have heard of this, investment has certain risks, so I personally recommend you to invest in a type that will not harm you.

LIGHTNING NETWORK;

In ancient times, we had to write letters to reach our loved ones. In order for us to send that letter, we had to go to the post office and then buy a stamp and pay a separate fee for it and to send the letter. In the early days of Bitcoin, the situation was exactly the same, transactions were slow, sometimes it could take days, shipping costs (fee)  were too high and we could send large amounts of bitcoin. Based on the example I gave above, Lightning Network enables us to do all our operations with a single click, and it is very fast and the shipping costs (fee) are very low.

How Does Lightning Network Work?

I will make it easier to understand by going through the sampling.

Douglas and Rafael must have two close workmates and send BTC to each other consistently at a low rate and quickly.  For this purpose, they set up a channel for themselves through the Lightning Network.   First, they need to create their multi-signature wallets, both with their own private keys. Then they load some BTC into their wallet (get 1 BTC).

After that, Douglas and Rafael are able to trade unlimitedly. Basically, we can say that the funds kept in the common wallet are sent between two people. For example, Rafael wanted to send 0.5 BTC to Douglas, all he had to do was transfer his ownership of his fund, two of them simultaneously approving the transactions and making the transfer happen. In order for the funds to actually change hands, they have to close the Lightning Network channel they have established. As a result, Rafael has 0.5 BTC and Douglas has 1.5 BTC.

The first and last balance information is sent to the Bitcoin blockchain only after the channel is closed. Lightning Network, on the other hand, performs multiple operations and processes them in a single line, thus taking up less space in the blockchain and ensuring that the processes take place at the speed of light.

Advantages of Lightning Network:

1- No matter how dense the blockchain network is, we can operate at light speed without any obstacles, so Bitcoin has become competitive with platforms such as Visa, Mastercard, Paypal.

2- Since the transactions we perform through the Lightning Network are outside the main blockchain chain, we will pay Very low transaction fees. In addition, Bitcoin is used as a payment method in businesses such as cafes and restaurants.

3- The vast majority of cryptocurrencies don’t completely care about anonymity, so transfers from one wallet to another can be easily tracked. Since Lightning Network creates a layer outside the main blockchain chain, it is impossible to track these transfers.

4- Lightning Network technology can easily handle 1000 user processes per second.

Disadvantages of Lightning Network:

1- Unfortunately, if the user to whom we send our funds is offline, we cannot perform our transactions.

2- Opening and closing a payment channel can often be inexpensive and unusable, as it is done manually.

In my opinion, the lightning network is a revolutionary system, so our operations are easier, safer and more stable.

That’s all astronauts have told you about this article in the Lightning Network, I hope I have given you information about LN. We are very excited about the Lightning Network, but are you excited?

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By community member Dogukan Kose