Lightning Network, the second layer of technology that operates on top of a blockchain and has been lauded as the solution to Bitcoin's scalability problems, appears to be gaining traction, even though this potential solution is still in its early stages. Lightning technology speeds up transaction time by pushing the exchange to off-chain payment channels so there's no waiting time for a block to be mined, thereby also alleviating mining fees.
Reports as of late April indicated the number of active nodes on the Lightning Network had crossed 2,000, with 5,801 open channels on the network. As well, its total network capacity had expanded past $150,000.
Since that information was released, the number of channels and network capacity have increased yet further. As of May 24, NewsBTC says 6,600 direct connections now exist. Though these numbers aren't staggering, it's clear the trend is escalating.
But full-scale uptake hasn't yet occurred either. Is this a negative indicator for the much heralded technology?
Not so says Vadim Koleoshkin CBDO at Zerion. The fact that more and more nodes have started supporting lightning network means the technology will ultimately gain adaption by Bitcoin users.
“The idea itself has existed for quite a while, even though its implementations still haven't reached their stable states. However, the fact that this scalability approach that has been discussed for a long time has been finally implemented, brings hope about the future of Bitcoin. To be more specific, if the technology is adopted by the majority of the community, users will be able to finally use Bitcoin on a daily basis, and it might replace credit cards faster. Moreover, Lightning gives a way for many new products for the Bitcoin ecosystem.”
Could Lightning Network be the puzzle piece the cryptocurrency and larger financial environments have been missing, the missing link needed for Bitcoin to achieve full utilization as both a completely accepted asset class and acknowledged payment vehicle? Michal Zajda, Lead Architect at aeternity, the blockchain 3.0 platform, believes the Lighting Network is one of the missing pieces needed as well as a much anticipated extension of existing blockchain systems.
It feels very natural from a usability point of view, explains Zajda, and it enables us to make elements of blockchain systems far more scalable. In Zajda's view, the Lightning Network is essentially the instant messenger of blockchain which finally makes it possible for consumers to engage in a simple task, like buying a cup of coffee, without risk or delay.
“It is positive to see Bitcoin adopting new layers that make it friendly and convenient to use. This also represents a major opportunity for altcoins to impress the public with the native handling of payment channels and further drive the adoption of cryptocurrency.”
The evolution of the blockchain protocol has been evident over the past few years, and new research in the area continues to develop. Notes Zajda, "this research gave us tools to implement not only payment channels but also, so-called state channels which are capable of executing contracts between parties."
Although the Lightning Network has been tipped as the solution to Bitcoin's scalability problem, Gabriele Giancola, co-founder and CEO of blockchain-powered loyalty ecosystem qiibee acknowledges it's still early days. Notwithstanding that there's been substantial uptake in the payment protocol (based on additional active nodes), "it remains to be seen what implications this will have for the crypto market," he says. "Still, if it works, it could pave the way for the innovative solution the crypto community has been waiting for.”
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