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Lightning Network — A Second Layer Payment Protocol

Lightning Network — A Second Layer Payment Protocol

What Is The Lightning Network?

The Lightning Network is a decentralised protocol for instant (low-latency), high-volume micropayments down to 0.00000001 BTC (1 sat), without needing trusted intermediaries, dramatically reducing transaction fees and counterparty risk. It achieves this via smart contracts through a network of multi-signature transactions and scripts, so that any participant on the Lightning Network can pay any other participant.

It is a second layer payment protocol that can operate on top of a blockchain base layer (similar to how the internet is built in layers) and one of the first implementations of a multi-party smart contract (programmable money) using Bitcoin’s built-in scripting. [1]

source: https://blockstream.com/lightning/ History

The Bitcoin Lightning Network white paper was published by Joseph Poon and Thaddeus Dryja on January 14, 2016, and described as “scalable off-chain instant payments” designed for the transaction of the future: [2]

Instant Payments Scalability Low Cost Cross-Chain Atomic Swaps

During 2017, a number of test transactions were carried out on Bitcoin Core implementations before Blockstream (a blockchain technology company led by Adam Back who have also developed the c-lightning implementation of the Lightning Network protocol), announced in January 2018 that Lightning was live on main net with 60 nodes, coinciding with the launch of their Blockstream Store that allowed payment via Lightning.

This was still considered a testing phase and high-risk, leading participants at the time to become branded with the social media hashtag “#reckless”.

source: https://lightning.engineering

Lightning Labs (another business developing Lightning), initially founded in 2016 with support from the likes of entrepreneur Jack Dorsey (CEO of Twitter and Square).

In March 2018, CEO Elizabeth Stark announces the release of lnd 0....

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