Something some may not understand about crypto in general is how transactions are conducted on the blockchains listing them. Some blockchains make you pay per transaction. It’s important to note some blockchain’s capabilities for crypto transactions are more efficient than others. Bitcoin block chain has gone a step further and created the lighting network. But what is the lightning network and how does it effect work?
As bitcoin has grown so much over the past few years, the blockchain associated with it became congested. The overwhelming congestion was making transactions and other actions on the blockchain slow and expensive. That is why the lightning layer was created. The lightning network is a second layer added to the bitcoin blockchain. It acts as a speedway for transactions on the blockchain.
The lightning network uses micropayment channels to connect transactions. Micropayment channels are used to scale the bitcoin blockchain’s capabilities making transactions more efficient. Transactions conducted in this manner, on the lightening network, are less costly and faster than those conducted off of it. Other types of transactions like off-chain transactions involving exchanges can be conducted on the lightning network.
The implementation for the lightning network are growing as it has greater capabilities than the standard blockchain in terms of transaction abilities. Will there be other layers added to the bitcoin blockchain after this to aid other functions? We will have to stay tuned to find out.
For more information on blockchain check out Equa’s blog.