In January 2009, Satoshi Nakamoto introduced the world to the first implementation of a decentralized peer-to-peer electronic cash system in a tiny package called Bitcoin.
Adoption was slow at first, however, in the more recent years since, cryptocurrencies have quickly become the beacon of a modern culture progressing towards a total digital future.
Today, cryptocurrencies are being used in places that are socially far apart, from high-stakes betting casinos in Las Vegas, to lowly chicken farms in rural Central America.
Bitcoin’s new-found acceptance, beyond being a store-for-value platform, has vitally fast tracked the adoption of crypto by major global financial institutions and online market places.
Despite the unpredictable nature of bitcoin, industries are making new bolder and broader moves to integrate Bitcoin into daily activities and so are governments.
El Salvador became the first nation to officially adopt and recognize bitcoin as legal tender.
For all its new found popularity and promise, Bitcoin still faces the same one major critique it has had since it’s conception; the speed of the block-chain network on which it runs.
Bitcoin algorithms were designed to facilitate optimum security and privacy and this one-layer technology of the block chain platform handles billions of daily transactions.
Sadly, it is by the same design that such on-chain transactions are slow and costly to use.
Currently, the block-chain only seven bitcoin transactions per second. VISA, by comparison, handles averagely sixty five thousand transactions in the same time frame.
Such scaling limitations explain why Bitcoin has mainly remained an investment vehicle.
Bitcoin is considered as a place for bitcoiners store digital gold and accrue value, rather than use the currency for regular day-to-day transactions in mainstream markets.
But through the digital storm, there finally blasts an answer – The Lightning Network!
What is the Lightning Network?
The Lightning Network (LN) is a second layer protocol technology, designed to use micropayment channels to de-congest the bitcoin blockchain and reduce associated fees.
LN achieves this by settling transactions away from the main blockchain through a growing network of user-hosted channels and nodes, making them off-chain transactions.
Off-chain transactions are faster, less costly and more readily confirmed.
LN’s off-chain functionality allows exchanges like atomic swaps between cryptocurrencies without the involvement of an intermediary, such as cryptocurrency exchanges.
How does Lightning Network work?
As the saying goes, only a well-oiled machine runs smoothly.
From the increased popularity of the bitcoin crypto currency in recent years, came increased seed fund support for Lightning Labs, the company behind the genius of LN.
With the machine then well-oiled, Lightning Labs’developers have hastened their efforts and have altogether made some of the most incredible breakthroughs in the technology.
Lightning Network’s breakthroughs
Lightning fast transactions and payments
On the Lightning Network, transactions do not need to be validated by all blockchain participants and therefore, transactions are facilitated to happen instantaneously.
The network achieves a standard of bi-directional trust between two transacting peers.
The Lightning Network facilitates this milestone through an off-chain multi-channel payment system that favors transactions and costs significantly less than other platforms.
Blockchain smart contracts enforce security without having to create on-blockchain transactions for individual payments.
This makes the Lightning network capable of millions to billions of transactions per second, while maintaining the promised security and trust of base layer Bitcoin.
Lightning Network is open-source to open the world
The open-source nature of the technology embedded in the Lightning Network ought to be credited for the incredible and exponential growth rate achieved by the network.
Developers outside Lightning Labs can build for crypto based-systems on top of the 2-layer technology and continue to add value to the larger and growing payment ecosystem.
In supplementing this Lightning Labs’ innovation, each new layer built on top of Bitcoin and Bitcoin LN makes the first layer more valuable and improves network effects.
With innovation from third party players and developers, the network has expanded to the bear market and the bull market, both of which have seen record-high coin value.
LN is growing bigger than ever before
For every new first-time user on the network, the network grows a new active node.
In 2021, LN surpassed 25,000 active nodes. For an open network such as LN, this data implies that the network is growing stronger with more users and more channels.
In practical essence, a node represents a user on the network who sets up a computer to interact and exchange cyptocurrency with other nodes on the network.
Therefore, it is a very big deal for the crypto world.
The Lightning Network already has capacity to sustain more than 25,000 nodes actively exchanging digital cash tokens without any major glitch to the core technology.
Bigger Lightning Network, better wallets
More impressively, LN is boasting of an 8% activity node growth rate as of August 2021 with industry experts predicting an even higher growth rate at the close of the year.
The scalability opportunities that this promises for the crypto industry, makes the LN a fast rising tide that is metaphorically and literally lifting all the boats in the crypto current sea.
Should Lightning Network adoption continue to grow along it’s current trajectory, the industry can expect more wallet developers to integrate Lightning Network support.
And as Lightning Labs continues to perfect their innovative interoperability features that look to ease multi-app wallet exchanges, the transactions times only get faster by effect.
A fast-rising tide, the Lightning Network is, indeed in the world of Bitcoin.
History may not recognize the significance, but digital historians won’t miss the epic events that the Lightning Network has caused in exponential effect in 2021 alone.
Continuing with the rolling tide of the latest epic lightning events, Twitter officially rolled out a bitcoin tipping feature that had for not-long been rumored to be in the works.
Like many others third party app builders, Jack is putting his money where his mouth is.
The Twitter CEO remains mentioned by Bitcoin news outlets for having, only in June 2021, staked that in practice, a Bitcoin future is no longer a matter of ‘if,’ but of ‘when.’
The Lightning Network is clearly the undisputed bitcoin platform that is blazing the ground breaking pathway to a global cryptocurrency future for everyone.
Gerald Ainomugisha is a freelance Content Solutions Provider (CSP) offering both content and copy writing services for businesses of all kinds, especially in the niches of management, marketing and technology.