Lightning Network Goes Live, Bringing Promise of Faster Bitcoin
A newer version of bitcoin’s Lightning Network went live Thursday, bringing with it newfound promise of faster and cheaper transactions. For market enthusiasts, the highly-anticipated release could pave the way to a more efficient ecosystem that allows cryptocurrencies to fulfill one of their core mandates: provide decentralized payment systems.
Lightning Network Daemon Gets Beta Version
In a Thursday blog post, blockchain startup Lightning Labs announced the beta release of the Lightning Network Daemon (LND), a new software that can be used to access bitcoin’s Lightning Network. Daemon is the fourth major release of the Lightning mainnet beta. Its backers view it as an important milestone in bringing faster and cheaper payments to the bitcoin network.
“With this release, LND has gained a considerable feature set, deeper cross-implementation compatibility, a new specialized wallet seed, comprehensive fault-tolerance logic, a multitude of bug fixes, and much more!” the company said.
The release comes after a yearlong consultation with thousands of developers and volunteers, who assisted Lightning Labs in testing the new protocol. While LND is not the only implementation of Lightning Network, all versions are intended to work with each other. Lightning Labs said more than 60 contributors participated in the beta.
In the blog post, Lightning Labs also said it secured $2.5 million in funding from major investors that include Twitter CEO Jeff Dorsey, Tesla investor Bill Lee and Jacqueline Reses of Square Capital.
Bitcoin Fees Plunge
For all the fear, uncertainty and doubt engulfing cryptocurrencies lately, the release of Lightning Network Daemon is seen as an important milestone in bringing bitcoin payments mainstream. The cryptocurrency skyrocketed last year, but so did its transaction fee, hitting a high of $50.
Transaction fees skyrocketed last year, hitting a high of $50. Fees have fallen dramatically since then, but so have the number of transactions.
The new protocol aims to resolve network bottlenecks by opening up new payment channels between users. As a result, Lightning Network can process over a thousand BTC transactions per second, which is a tiny fraction of Visa’s 56,000 per second, but a dramatic improvement over bitcoin’s five per second.
Through the Lightning Network, users conduct transactions without having to go record them on the bitcoin ledger, thereby reducing delays and network bottlenecks. Once the Lightning channel is closed, only the only the balances are recorded on the bitcoin blockchain.
News of LND failed to stem bitcoin’s price drop on Thursday. The coin touched a session low of $7,682 before recovering around $8,200.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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