At the time of publication, the Bitcoin network is facing more than 135,000 unconfirmed transactions. This comes a few days after proponents of the SegWit2x staging solution announced that they would not go ahead with a doubling of the size of the Bitcoin blocks due to A lack of consensus. Since the largest blocks are clearly dead in the water, there is only one apparent solution to the problem of scalability: the lightning network.
The Lightning Network is a scaleless solution that can solve Bitcoin's scalability. problem. As the volume of transactions on the Bitcoin network increases and the amount of data that can enter a block remains the same, the Bitcoin economy suffers from a congested network. It is starting to take longer than usual – up to several hours – for a transaction to be confirmed on the Bitcoin network and high transaction fees are weighing on the network again.
Issue of & # 39; scalability Bitcoin
The result is that Blockchain transactions are written more slowly than they are created by users. Over time, a backlog develops and transactions can wait hours to be included in a block. Users can ensure that their transactions are confirmed faster, but only for exorbitant fees.
What is the Lightning Network
The Lightning Network would implement an intelligent contract script in the Bitcoin network that would open private payment channels between a peer and all others peers with whom he trades. In addition to all the private payment channels of which they are part, each of the peers would have an open channel to the Bitcoin Blockchain
The peers would carry out transactions between them in their private channels, but only the final result of the chain. transaction would be broadcast at the Blockchain. For this reason, minors would process far fewer transactions than they currently do. In theory, the surge arrester network makes peer-to-peer transactions more efficient, scalable and low cost. The software is being tested on the Litecoin network.
Laying of a foundation
The implementation of the lightning network was first triggered by the activation of the separate witness (SegWit). This code separates signatures from transaction data to free up space in a block. SegWit has given the Bitcoin network the ability to process up to four times more transactions in a block than before. In practice, however, we expect to simply double the capacity of the network.
SegWit was needed to correct the mallability bug of Bitcoin transactions, which would have prevented the operation of the Lightning network. Along the way, miners and industry companies gathered in New York to accept a compromise proposal of scale. The group agreed that SegWit would be allowed to activate until it was followed in November by a doubling of the block size to 2MB.
However, on November 8 , SegWit2x has been postponed for lack of support. Since Bitcoin core developers and the community were so strongly opposed to increasing the size of the blocks, the only solution that remains on the table is a lightning network. network, the checks would be instantaneous and competitive with the transactions. Private payment channels secured by multi-sig and time locks allow peer-to-peer transactions to occur instantly. This means that individuals will no longer have to wait too long for their transaction to be confirmed.
Since private channels operate separately from the Bitcoin network, miners will have fewer transactions to process than they currently do. All transactions will no longer be published in the Blockchain. rather, only the final results of the peer transactions will be recorded. This leads to a more efficient use of data limitations on the current Bitcoin network
A scalable and inexpensive protocol like Lightning Network has the ability to attract customers away from traditional financial intermediaries such as Visa . Merchants will no longer have to pay exorbitant transaction fees, shipping costs, verification and mediation. What's even better is that your transaction takes place directly between you (the first party) and the party you are dealing with (part two) without having to go through a financial intermediary (third party) that n & # 39; 39 has virtually nothing to do with reality. transaction at hand
The crisis of the scale is not yet solved
It becomes clear that the issue of scaling continues to haunt the Bitcoin network. In recent days, the price of Bitcoin has dropped while that of Bitcoin Cash has increased dramatically. Bitcoin Cash is a Bitcoin fork that has removed SegWit and has increased the block size to 8MB. Many members of the Bitcoin community who supported larger blocks as a scaling solution have probably migrated to Bitcoin Cash.
Other altcoins are also working on scalability solutions; indeed, the ability to scale might well determine the top cryptocurrency in a few years. If Bitcoin can not, then others will probably do it. Already, Ethereum is working on scaling up through its Raiden network, which uses payment channels similar to those of the Lightning network. Similarly, the Dash Digital Currency is experimenting with the use of ultra-large blocks to implement a true scaling of the chain. The project has just released an update that will increase the size of Dash blocks to 2 MB when it will be fully activated in about a month.