Today I will talk about ₿itcoin's Lightning Network.
What was it invented for? Theoretically to solve some problems that afflict the Bitcoin ecosystem.
What are these problems?
⚠️ High Fees (in December 2017, fees even reached $ 40!)
⚠️ Scalability and number of transactions
All this has repercussions on non-convenient micropayments.
For these reasons, Lightning Network has been developed to work alongside the Bitcoin blockchain.
What are the goals?
✅ Increase scalability
✅ Usability
✅ Increase the speed
✅ Decrease the commission costs
Lightning Network provides for the execution of some ᵒᶠᶠ⁻ᶜʰᵃⁱⁿ ᵗʳᵃⁿˢᵃᶜᵗⁱᵒⁿˢ, therefore not transmitted in the Bitcoin blockchain. The idea is to create a tunnel between the two members of the transaction who exchange money.
In essence, therefore, transactions performed on the dedicated channel take place instantly without any transmission to the blockchain (only the opening and closing transactions will be recorded).
It is also possible to create a particular type of 𝕤𝕞𝕒𝕣𝕥 𝕔𝕠𝕟𝕥𝕣𝕒𝕔𝕥 between the two members of the channel. In addition to all these advantages, with Lightning Network there is the theoretical elimination of fees (low fees).
Transactions are stored locally in users' nodes and can then be transmitted at any time through the network.
Lightning Network also integrates a d̶o̶u̶b̶l̶e̶-̶s̶p̶e̶n̶d̶i̶n̶g̶ protection mechanism (the attempt to spend its money several times). In fact, if two transactions are based on the same output, only one can be confirmed.
Another basic element of the Lightning Network is the m̳u̳l̳t̳i̳-̳s̳i̳g̳n̳a̳t̳u̳r̳e̳ a̳d̳d̳r̳e̳s̳s̳e̳s̳ (also called P2SH addresses).
Multisig addresses are Bitcoin addresses that require multiple private keys to unlock and spend Bitcoins. Unblocking Bitcoins from 2-of-2 multisig addresses therefore requires two signatures, from two dedicated keys.
There is also a function of creating ⲧⲓⲙⲉ ⲃ𝓵ⲟⲥⲕ𝛓, which can block incoming Bitcoins, so as to make them usable only at a defined moment.
🅷🅰🆂🅷 encryption can be included in the output, so that BTC can only be spent after entering a secret key.
Lightning Network allows you to set up two-way payment channels: this means that between two members A and B, both parties involved can agree on an opening transaction that determines how many Bitcoins are deposited in the channel by each of the two parties.
