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Is Lightning Network the Savior of Bitcoin?

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Is Lightning Network the Savior of Bitcoin?
Source: Open Platform

To be able to fully understand the Lightning Network, why it was developed, and what its potential is, we will have to go back to the launch of Bitcoin. When Satoshi Nakamoto initially revealed Bitcoin to the world via a mailing list, one of the first reactions was; ‘great idea but it will not scale’. The first criticasters were immediately concerned with the scalability of Bitcoin transactions on the blockchain.

The reason for this is the way the blockchain works. For it to safely work, every user would have to store loads of transaction details on their hard drive, making it an inefficient system by nature. Another issue to be addressed is the transactions per second [TPS], which greatly affects its usability.

In the past, this situation had not yet resulted in critical situations, but everyone can agree on the fact that for cryptocurrencies to be adopted commercially (for example buying coffee or doing groceries), the amount of transactions per second needs to rival centralized solutions which can handle thousands of transactions per second. Otherwise, merchants cannot accept cryptocurrency payments because the price of the asset fluctuates too often. In Bitcoin’s case, the Lightning Network may help solve this issue.

The Lightning Network creates an extra layer on top of the Bitcoin Blockchain, where it can settle a large number of transactions and subsequently write it to the Blockchain as a single unified transaction. This principle is not new, we have seen it with more conventional currencies as well. Where the Euro and Dollar are linked to the gold reserves, Lightning is linked to Bitcoin as a landmark or, when needed, an arbiter.

Similarly, real-world transactions are also often collated and settled in a single transaction, rather than individually. Since the Lightning network will take many transactions off-chain it will severely reduce the load on the Bitcoin Blockchain, thus allowing it to scale to many more transactions per second, without increasing on-chain load.

For example, Pascal often gets a coffee at Starbucks on his daily commute to work, which he likes to pay for in Bitcoin. Doing so five days a week, you would bump into some hurdles, not necessarily problems, but observations to take into consideration. First, every transaction you make will be stored on the Blockchain. Secondly, the transaction fees you will need to pay for the transactions will sometimes be extraordinarily high in comparison to the actual transaction value. Finally, it will take approximately 10 minutes for your transaction to be confirmed. Very inefficient for a quick coffee to go, don’t you think?

Here’s what Lightning Network can do to help smoothen things out between you and the cashier. In this case, the Lightning network is used as a micro-payments system which leverages off-chain capabilities to settle transactions that are ultimately updated on-chain, reducing the burden on the Bitcoin network.

This basically means that instead of having every coffee noted on the Blockchain, there will only be two messages sent on blockchain (on-chain); One initiating a payment channel between you and Starbucks and another to close it when the day is over for example. Final balance is updated on-chain.

It is like going to a bar and giving the waitress a hundred dollars in advance, so you will not have to take out your wallet every time you order a beer. Afterwards, just before heading home, you ask for an update on your status and will receive your change back. The channel is now closed. Using this principle, we can scale payments on the blockchain to millions of TPS, making Bitcoin a viable option for mainstream payments.

However, for all the future benefits of a scaling solution like the Lightning Network, there are still some downsides that need to be addressed. Unlike a blockchain, the Lightning Network does require both parties to be connected permanently while the channel is open. This can lead to more centralized hubs because transactions have to be routed.

Transactions can begin to revolve around certain hubs to reach a larger group in the network. Additionally, the Lightning Network only works for Bitcoin, and would not interoperate to promote scalability and adoption of other cryptocurrencies.

There are many players in the blockchain space attempting to solve scalability, however, it is still unclear what the dominant solutions will be. Often solutions do not allow for interoperability, meaning that even if a single player solves the problem, it might persist on many other blockchain networks. This opens a whole new opportunity to solve problems on all platforms.

OPEN is building an easy solution which allows for cryptocurrency transaction integration into existing applications. It does so by linking the OPEN API to regular software, in a manner familiar to most developers. This way solutions can be shared easily using development capability that is much more available than core blockchain development knowledge.

The OPEN platform doesn’t rely on one solution’s success to enable wide consumer adoption of Blockchain technology. Instead, it encourages the use of many cryptocurrencies through the OMG SDK. Leveraging our unique API economy will allow us to connect to any scalable blockchain solution, guaranteeing interoperability and scaling. If the Lightning Network is a success, then OPEN’s API economy will leverage this, however, OPEN will capitalize on any benefit created by any other cryptocurrency as well.

The blockchain revolution will unlock trillions of dollars’ worth of potential and scalability will play a huge role on the consumer and business side alike. OPEN Protocol drastically reduces the complexity of cryptocurrency payments integration and can thus give blockchain technology a significant adoption boost.

Using OmiseGo’s SDK, OPEN will bring scalability together with interoperability of payments. OPEN Platform is very excited to see the Lightning Network and other scalability solutions develop, and are rooting for a rich and useful blockchain ecosystem.

If you are interested to learn more about how you can contribute to and benefit from the ongoing revolution, Click here!




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Altcoins

Tron [TRX] energy cost to be reduced from 20 sun to 10 sun

Priya

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Tron [TRX] energy cost to be reduced from 20 sun to 10 sun
Source: Unsplash

The whole cryptocurrency market has been witnessing a steep downward trend for the past couple of weeks. Even the major cryptocurrency like Bitcoin [BTC], Ethereum [ETH] and XRP, have lost the battle against the ice king. This negative trend has broken down most of the new projects in the market, especially the investors’ sentiments. There are also a few projects and team that are finding it hard to continue their operations because of the bear’s ever-growing presence.

Despite this, Tron [TRX], the tenth-largest cryptocurrency by market cap, continues to make advancements in terms of network development. Justin Sun, the founder and CEO of Tron Foundation presented the second proposal, Proposal 9, has been approved by 2/3rd of the governing body. The proposal is aimed at making the network a developer friendly environment by reducing the energy cost from 20 sun to 10 sun, which, in turn, reduces the cost of smart contact.

Justin Sun's tweet on the proposal | Source: Twitter

Justin Sun’s tweet on the proposal | Source: Twitter

At the time of writing, the proposal had received 22 approvals and no disapprovals. The representatives who voted for the proposal includes Justin Sun Tron, Tron Society, BitGuild, Tron One, Lianjinshu, uTorrent, Crypto Guy in ZA, Infinity Stones, Alle Exchange, Tron Alliance, TronWalletMe, Raybo Tron, BitTorrent, Blockchain Org, CryptoChain, Sesameseed, callmeSR, DApp House, Tron Spark, TRX Market, Sky people, and Tron Europe.

The first proposal of the month was related to maximizing the energy limit of the network, which was also aimed at supporting the developers of the ecosystem. The proposal was approved by all 28 Super Representatives of the network. Super Representative are the representatives of the community and validators of the node who are elected by the token holders. These representatives are given the power to vote for the activation of the features of the Tron Virtual Machine, with the focus on the betterment of the entire community.

Earlier today, the CEO of the Foundation spoke about how Tron surpassed Stellar Lumens, the fourth largest cryptocurrency by market cap. He said on Twitter:

“According to @CoinMarketCap, there are 159 trading pairs of #TRON which already surpassed 157 trading pairs of Stellar. #TRX was already listed on more than 100 exchanges, including Crypto/Crypto & Crypto/ Fiat trading pairs”


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Analysis

XRP/USD Technical Analysis: Sideways movement to end as breakout imminent

Priyamvada Singh

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XRP/USD Technical Analysis: Sideways movement to end as breakout imminent
Source: Pixabay

As the cryptocurrency market switches their allegiance between the bull and the bear, XRP is painted red at the moment. The token is slumped by more than a percent wherein the coin is trading at $0.3 with the market cap of $12.4 billion. The 24-hour trading volume is calculated at $305.8 million.

1-hour

XRP 1-hour candlesticks | Source: tradingview

XRP 1-hour candlesticks | Source: tradingview

In the 1-hour price chart, the downtrend is ranging from $0.315 to $0.311 whereas the uptrend is extending from $0.301 to $0.308. A clear possibility of a trend breakout is visible as the prices are packed tightly, ready to explode in either direction.

The Parabolic SAR is bullish on the cryptocurrency as the dots have assembled themselves below the candles to support the bull.

The Aroon indicator is showing a greater strength in the downtrend, which is a bearish sign for XRP. However, it can be observed that the red trend is losing its power and crashing.

The Awesome Oscillator is slightly bullish on the coin as the bars have turned green at present.

1-day:

XRP 1-day candlesticks | Source: tradingview

XRP 1-day candlesticks | Source: tradingview

In the 1-day timeline, the downtrend is stretching from $0.51 to $0.31 whereas the uptrend has been observed from $0.27 to $0.3. A trend breakout is not visible as of now.

The Klinger Oscillator has made a bullish crossover by the signal line. This indicates that the reading line is traveling in favor of a green trend.

The RSI is extremely bearish on the cryptocurrency as the indicator has crashed to the bottom of the graph. A trend reversal is not expected as well, as the reading has not hit the oversold zone.

Conclusion:

In this technical analysis, it is clear that the indicators are giving a mixed sign, advocating for a sideways trend. However, since a trend breakout is predicted in the shorter timeframe, a bullish win might take over the price chart.


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