Intro to Lightning Network Apps (LAPPs)

The idea of a second-layer scaling solution to Bitcoin, such as the Lightning Network, has far surpassed the days of ideation. Yet one of the most exciting features of the recently-implemented Lightning Network remains surprisingly undiscussed: the ability to build decentralized-like apps (known as Lightning Network Apps or LAppps) on top of the Lightning Network mainnet.

But I thought Bitcoin lacked smart contracts & isn’t turing-complete?

No matter. Answering the call to necessary & creative off-chain implementations, the day has arrived finally arrived when the Bitcoin ecosystem — through the lightning network — supports “decentralized-like apps.” Thanks to the innate infrastructure of multi-signature, off-chain transactions through LN’s payment channels.

The bi-directional, off-chain connection between exactly two nodes that enables lightning-fast transactions is defined as a payment channel. Any two nodes within the network can open a channel between each other by sending a diminutive amount of Bitcoin to open the payment channel. Once opened, users are free to send Bitcoin back & forth as many times as they’d like. Upon finishing their transactions, users can opt to essentially close the channel — the final balance is mined & only a single Bitcoin transaction is recorded on the Bitcoin blockchain.

However, a single node can have thousands of these two-way channels open at any given time — thus leading to scalability through a network effect.