If you have been involved in the Segwit-BCash debate then you may have heard of the lightning network and instant transactions. So I wanted to talk about this new technology, how it works, and explain the upsides and downsides of the technology.
So the Lightning Network is a soft fork and separate blockchain from the normal Bitcoin blockchain which will allow for bitcoin payments to be sent over a different system that is instant. This new blockchain uses smart contract tech similar to Ethereum. This new chain will be able to hand more transactions than even major credit card companies.
The lightning network works similar to a multi-signature wallet in that basically you transfer your funds to a wallet where 2 people would sign off on the transaction, then the transaction is sent over nodes run by the lightning network across my different countries.
Even with this great technology, there are still flaws that I would like to talk about so that we may address them and hopefully bring this technology to the network in its most refined form. One of the biggest problems with the lightning network that is a concern to me and a lot of other people, and that is centralization. If you couldn't tell the lightning network is incredibly centralized with goes completely against the Bitcoin dream.
Now one one hand I don't want any centralization in the network, but on the other I have a way this can be implemented in a way that it will be used as a tool like any other centralized website on the blockchain. What will probably happen is the community will decide to make this a secondary part of the chain that is used to transfer small amounts of money without the hassle of confirmation times and high fees, this way the network does not become reliant on centralization but can still take advantage of an interesting tool.
So although controversial for its threat of centralization, the lightning network could provide a great way for people to get around high fees on the network and could even fix scaling problems entirely if done correctly. Thank you for reading and if you read this whole thing and enjoyed it you could consider supporting me below.
Genesis Code: SWBjqo
Bitcoin: 17CnwKFT5tamNG4vHCNxRKotzjnH1ay2V7
Ethereum: 0x69BD6a0F7222368f51cCCE98D6DbdAAfBEc019c0
Sources:
Lightning Network Home: https://lightning.network/
Images:
http://www.communitychiroandwellness.com/how-does-work/
https://medium.com/@Magnr/centralized-vs-decentralized-banking-5c2a657e94b7
http://www.sedayu.com/en/solutions
