What Is the Lightning Network?
The Lightning Network is built on top of Bitcoin, acting as a Layer-2 protocol that aims to improve Bitcoin’s scalability and transaction speed. A major feature of how the Lightning Network facilitates this is by taking transactions off-chain to process them instead of on-chain. This makes the process quicker and circumvents the need for transactions to communicate with nodes, which usually slows the process.
Why Lightning Network?
Bitcoin is strong when it comes to decentralisation, which makes it quite secure. However, it suffers from scaling issues. The Bitcoin network can only process seven transactions per second (tps), which is extremely low compared to traditional solutions like Visa, which can handle tens of thousands of transactions. The Lightning Network has become a solution for Bitcoin’s increased availability and adoption by the masses.
Lightning Network Concerns
Although the Lightning Network scales Bitcoin to become more viable as a payment method, it doesn’t come without risks. Individuals have stated that security might be an issue for the Lightning Network, as it could be more susceptible to hacks. Another issue is that, for the Lightning Network to run, it is required to be constantly online.