A version of a software that can make cryptocurrency payments faster and cheaper just went live on Thursday.
The software which is called Lighting Network can finally be used for making Bitcoin payments after more than a year of testing. The initial version, among which Lighting Labs helped develop, is compatible with networks being developed by other companies such as Acinq and Blockstream.
Bitcoin has become a practical investment alternative to gold to many. But, ever since transaction fees have gone up to $50 and confirmation times took almost a week, many people think it has strayed from its original purpose of becoming digital money. The Lightning Network, however, is confident that they will be able to solve these issues by offering fees at a fraction of a cent and faster transactions!
The Lightning Network lets Bitcoin users open any payment channels between each other. Both parties can perform transactions without posting them to the bitcoin blockchain. With this, users can avoid delays and high transaction fees. When the channel is closed, only the subsequent balances and not the full transaction history of the channel are recorded on the blockchain. It is only after this that bitcoin fees are paid.
Founder and chief executive officer of Lightning Labs, Elizabeth Stark says that the most likely users will be merchants and online businesses because it enables high volume of payments and allows micropayments with its near-zero fees. Cryptocurrency exchanges may also use the software for accelerating deposits and withdrawal of funds.
Stark says that “Bitcoin enthusiasts have gotten excited about this, merchants are excited about this”, and she also added that “It feels like we’re on the edge of mass cryptocurrency adoption.”