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Does lighting network really solve the scalability problem?

Mohan Pratap

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Lightning Network Scalability Issues
Source: Pexels

Bitcoin believers and skeptics alike have been waiting for “Lighting Network” which is said to solve the scalability problem of Bitcoin. The network would use an off-chain protocol and is currently under development. The first public alpha release was made on 10 January 2017 and although it promises to solve the scalability problem of Bitcoin many experts believe that it will create a lot more problems that will be unable to solve.

What is “Lighting Network” and why do we need it?

Lighting Network is the proposed solution to the traditional blockchain tech which is used to maintain all the transactions of Bitcoin among its users. Bitcoin cannot provide high-speed transitions like its rival currencies like Ethereum or Ripple. The current transaction fee is directly proportional to the network congestion and is extremely high with sometimes peaking at $30 for a transaction.

Lighting network is supposed to solve these problems. It is a protocol allowing for a series of off-chain bidirectional payment channels. Users can open a channel (node) between themselves for transfer of Bitcoin that is from one to another. The advantage is the two people using a node can transfer money instantaneously without any waiting period and transaction fees.

So what is the problem?

The Lightning Network is primarily meant for smaller transactions and they won’t be broadcasted like the current network. The increase in the number of users means the dependability and the security of the network will decrease. The transfer of money happens between two nodes and the origin of the money is not known. Developers have suggested amendments like implementing a signature which will verify the source.

Since smaller payments will be routed through the correct nodes for faster payments, pre-funding of the route will be required and people will choose to keep a low balance and top it up only when required.

So what does it mean?



Jason Tharian, a blockchain developer from Copenhagen, says,

“It doesn’t change anything, problems are there with every solution, you don’t just do nothing and give up. There are problems with the current Lightning’s tech but there are solutions as well and it will be fixed in the future.”

Henry Jackson, a Financial Advisor from Toronto, says,

“If you read through the ‘problems’ in the Lightning network, I’m sure 95% of the investors wouldn’t even understand the tech, which means the issue of funding the routes and network would not arise. Majority of the investments are done through huge exchanges who would follow standard network procedure. I think people are fussing over nothing, Lightning is a positive change, scalability will improve and Bitcoin will improve”





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Mohan Pratap is a contributing News writer at AMBCrypto. He is an Engineering graduate with an acute curiosity to unravel Blockchain and technology-related stories. Mohan currently does not hold any value in any cryptocurrency or its projects.

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Bitcoin

John McAfee says he will reveal Nakamoto’s identity, Coinbase expands to 11 countries, and more

Priya

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John McAfee says he will reveal Nakamoto's identity, Coinbase expands to 11 countries, and more
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Daily Crypto News – April 18

1. John McAfee on Satoshi Nakamoto: The Founder of McAfee Associates stated that he would narrow down on the identity of Satoshi Nakamoto until he reveals Satoshi himself, otherwise he would reveal his identity to the crypto community. He also spoke about how he knows about Satoshi, to read about it, click here!

2. Coinbase expands its services to more countries: The leading exchange platform announced that it expanding its services to 11 more countries, which includes India, South Korea, and New Zealand. People in these countries can avail services provided on Coinbase.com, Coinbase Pro and its app on iOS and Android.

To know more about the countries Coinbase has expanded to, click here!

3. Craig Wright says the crypto-community want to silence him: Craig Wright, the self-proclaimed Satoshi Nakamoto, stated that the majority of the community was against him as they “desire to silence” him because they see someone who would bring an end to scams and pumps and dumps.

He also spoke about the next steps he would be taking in terms of the legal action concerning his defamation case. To read about it, click here!



4. Binance “marks the birth of a new genesis block”: The largest cryptocurrency exchange in terms of trade volume announced the launch of its Decentralized Exchange, and also stated that the mainnet swap would take place on 23 April 2019.

To read more about Binance DEX, click here!





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