Issues surrounding Bitcoin scalability and sustainability have been well documented in recent months, but we probably don’t need to tell you that. When you get wrapped up in the media hoopla, you might begin to think that the vision of cheap and cost-effective Bitcoin transactions is nothing more than a pipedream. But, thanks to new innovations, it might be a closer reality than you think. The Lightning Network is looking to change the face of Bitcoin, transforming it back into a fully functional, transaction-driven currency. Proving that the Lightning Network is much more than just a clever idea, the first real Bitcoin payment recently took place through mobile top-up platform Bitrefill cementing its legitimacy.
From rumour to reality
Alex Bosworth, the developer of Lightning apps HTLC.me and Y’alls, revealed the news of the Lightning Network’s very first real money transaction. The transaction was the payment of a phone bill via Bitrefill, a popular digital service that allows users to top up a pre-pay mobile phone plan through Bitcoin or Litecoin. Low fees and no fuss, this development is sure to add extra weight to the argument that the Lightning Network presents the long-awaited solution to Bitcoin’s scalability problem.
How it all works
The Lightning Network has been generating interest as a project for years, but in recent times it has been commanding attention as the leading Bitcoin scaling solution. Operating through an off-chain system, the Lightning Network is formed through a network of manually and automatically created payment channels where funds are not entrusted to a third party prior to processing. Theoretically speaking, this takes pressure off the blockchain, allowing for seamless – and more importantly – low-cost transactions to take place without comprising the cryptocurrency’s trustless foundations.
Prioritising future privacy
Another factor that is helping generate buzz amongst Bitcoin users is just how the Lighting Network addresses anonymity. Bitcoin – at least in its current form – can’t truly be considered an anonymous cryptocurrency, something that the Lightning Network actually has the power to change. Adding additional layers of privacy to transactions, through the “Sphinx” protocol, all payments will be run through an anonymity network, which is Tor-like in many aspects. What this should effectively do is ensure increased privacy and fungibility within all Bitcoin payments.
Easy and effective integration
The Lightning Network isn’t simply a clever idea, it’s a way forward for Bitcoin, with payment integration being much simpler than some would have initially imagined. Sergej Kotliar (Bitrefill CEO) believes that further developments regarding Lightning Network implementation will only make it that much more impressive a system. He said, “At first we’ve enabled orders to be paid with Lightning. That’s the easiest integration for us. Next step will be enabling full lightning in our user accounts.” Kotliar was also quick to praise those behind the Lightning Network, “credit belongs where credit is due with all of the independent and corporate developers of the Lightning protocol.”
Changing the face of Bitcoin
Bitcoin is going to change the way the world’s population views currency, that much is certain, with the Lightning Network only adding additional weight to this way of thinking. Now, with a real money transaction in the books, the world is now one step closer to seeing Bitcoin’s biggest issue in scalability potentially becoming a thing of the past.