About Lightning Network
What is this article about?
Blockchains are slow.
And therefore, expensive. If I had to send you some Bitcoins, you’d receive them in about a couple of hours and I’d have paid a heavy transaction fee too. With such a reputation, how will Blockchains take over the world?
Any idea that can solve the non-scalability of Blockchains is worth attention, time and effort. Lightning Network is one such idea. But before we understand the solution, we’ll need to understand the problem.
If you’re already aware of the problem, you can directly jump to the next section.
Why Blockchains are slow?
Think of a Blockchain as a register.
And this register contains several pages (blocks) where each page has several transactions. As soon as a page has been filled with transactions, it needs to be added to the register before starting to record transactions on the next page.
Before a page (block) can be added to the register (chain), there’s some processing that needs to be done to ensure that everyone agrees with the contents it contains. The process approximately takes 10 minutes (for Bitcoin Blockchain) for each block.
Imagine, you send 1 BTC to your friend. The transaction will look something like this.

an exchange contains data about the sender, the beneficiary, the sum and the exchange expense.
Hold up a moment, exchange expense?
Truly, there’s an extra charge.
You can pay it to boost mineworkers to incorporate your exchange in a square at the earliest opportunity. There’s no set cost and it’s altogether up to you the amount you will pay to accelerate the procedure. The higher the expense, quicker your exchange will experience.
At any given minute, there are a few exchanges accessible to be recorded on the present page.

The miners, i.e. PCs working in the Blockchain arrange, need to choose which of the accessible exchanges to incorporate into the present square. To enable them to choose, they take a gander at which exchanges yield the most rewards — implying that the exchanges with the most noteworthy exchange expense will be incorporated first.

On the off chance that there are sufficient exchanges with a higher exchange expense than yours to top off the square, your exchange should hold up in line. The hold up can last from a couple of minutes to a couple of hours. Furthermore, now and then, even days. The more you pay in exchange expenses, the snappier your exchange is handled

That is the reason Blockchains are moderate, and subsequently, costly for everyone to begin utilizing. In a perfect world, the reception of Blockchain would mean more exchanges happening however as the quantity of exchanges goes up, the system will turn out to be moderate, making an obstacle for appropriation. What a conundrum!
Lightning Network (LN) is a potential answer for the issue.
One more time, what is Lightning Network ?
The thought behind LN is that not all exchanges are required to be recorded on the Blockchain.
Envision you and I execute many occasions among ourselves. In such a case, we can sidestep recording the exchanges on the Blockchain and take them away the chain.
In the least complex terms, how it’ll work is — we’ll open something many refer to as an installment channel amongst us and record its opening on the Blockchain. Presently, you and I can execute any number of times through this installment channel and it can remain open for any number of hours, days, weeks or decades. The main time we would contact the Blockchain until kingdom come will be the point at which we would need to close the channel. At that point, we’ll compose the last status of the exchanges that happened through the channel on the Blockchain.
Utilizing this thought of installment channel, we can make a system of installment channels to such an extent that it would be just seldom required to exchange on the Blockchain. Envision there are three characters — Xan, Yelena and Zeke.
In the event that Xan and Yelena have an installment channel opened amongst them and Yelena and Zeke have an installment channel opened between them, at that point Xan can send cash to Zeke by means of Yelena.
Assume Xan needs to send 2 BTC to Zeke, Yelena will send 2 BTC to Zeke and Xan will repay Yelena with 2 BTC.
That is the thing that the possibility of Lightning Network is. Since you won’t contact the Blockchain frequently, the exchanges will occur at lightning speed. As you may have speculated at this point, all the enchantment occurs in the installment channels. How about we take in the enchantment trap at that point.
And what square measure those payment channels?
It’s sort of a safety strongbox wherever 2 individuals deposit equal amounts of cash and every place a lock on that.

This action of depositing equal amounts of cash AN exceedingly|in a very} box is recorded on the Blockchain within the variety of an ‘Opening Transaction’ and thenceforth a payment channel is open between those 2 folks.
The idea behind lockup cash in such a box is that nobody person will pay the money within the box while not the opposite. the money during this box is then accustomed interact between one another.

Be that as it may, they won’t open the box since they need to keep executing between themselves. That is the excellence of this course of action.
To envision how off-chain exchanges resemble, think about this:

That is the way installment channels work. In any case, that doesn’t verge on characterizing their actual potential. Their actual power is released when at least two installment channels cooperate to frame a system — The Lightning Network.
Got it, so how can it really work?
LN works by moving the incentive from the responsibility for Bitcoins to the guarantee of responsibility for Bitcoins.
This move is enormous. Like dependably, we will utilize a case to comprehend this. Envision there are three individuals — Xan, Yelena and Zeke — with the end goal that there’s an installment channel open amongst Xan and Yelena, and there’s another channel open amongst Yelena and Zeke. Note that Xan and Zeke have no installment channel between them.
In such a circumstance, if Xan needs to exchange 2 BTC to Zeke, he can utilize the installment channel amongst Yelena and Zeke to do that. What does that look like?
Xan solicits Yelena to exchange a guarantee from 2 BTC to Zeke on Yelena-Zeke installment channel and afterward he repays Yelena with 2 BTC on Xan-Yelena channel.

With such system of installment channels, an immense piece of exchanges can be off-stacked from the Blockchain to be carted out away the chain, in this way, arranging for the chain’s data transfer capacity. Utilizing a system of installment channels, a huge number of exchanges can happen, and that too without a powerful exchange charge.
That is the Lightning Network.
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