What You Need to Know About Lightning Network
Bitcoin has been a futuristic currency phenomenon from the start. It’s estimated that 106 million people around the world use bitcoin in their transactions.
This digital currency is ever evolving and expanding, making it even more important and intriguing to keep up with what’s next and what’s new.
The Lightning Network is curated for the frequent transaction users convince and satisfaction. By the end of this article, you’ll know the ins and outs of the Lightning Network and have an even better grip on the fascinating world of bitcoin.
What is the Lightning Network
What is this new method, and will it even last? The bitcoin community is hoping so, the benefits are definitely there. The Lightning Network, in cut-to-the-chase terms, is the "off-chain approach" to carrying out transactions.
When referring to off-chain, this is in regard to the well-known blockchain heavily used in bitcoin transactions (BTC). For those who have used this digital currency previously or for a while, you'll know the frustrations of transaction fees and waiting periods that can occur when using the blockchain.
This new inventive way of trading BTC was created in pursuit of lowering the number of fees users pay, allowing easier trade between users and businesses, and decreasing the large amount of traffic the blockchain has been receiving. Users will be able to open direct lines of payment with each other or a business that accepts BTC instead of going through the blockchain.
The future of digital currency is rapidly approaching and improving for the interest of its community. Continue to read below to learn more about the safety of the Lightning Network, how it compares to the blockchain, and when it is best to utilize this method.
Is This a Safe Method to Use?
One of the first things you may think about when dabbling in digital currency is the security of it all. How can you trust that your funds and information are secure, is the Lightning Network safe to use? The short answer is yes, your bitcoin and personal information are highly secure. Let's dig into the deeper truths of this new payment method.
Users of the blockchain will know that it is known for its trustworthy security and dependability; this is good to keep in mind when learning about the safety of the Lightning Network. As demonstrated by Simply Explained, the Lightning Network exists on the blockchain; it takes 2 actions (that are recorded) on the blockchain: 1). Open the direct transaction line, and 2). Close the direct transaction line.
Each party is partaking in a multi-signature wallet where BTC can be deposited, received, and exchanged. There are copies and records of the transitions made, and each transaction remains safely secure in the multi-signature wallet. And digital signatures are required of both parties to ensure safety as well.
Lightning Network vs Blockchain
As of right now, the blockchain on average can maintain 7 transactions per second, which explains the groans of waiting and transaction fees. 7 transactions out of the millions of people who are using bitcoin is not a great ratio.
The blockchain is great for keeping a transparent and public record of transactions while keeping users' information safe; alas, it simply can't quickly put out as many transactions that are coming in. That's where the inspiration for the Lightning Network comes into play.
The Lightning Network's purpose is to provide direct payment lines between user and user or user to business without clogging up the blockchain. Users will be able to utilize the Lightning Network to buy themselves lunch, purchase merch online, everyday bitcoin expenses that don't need to go through the heavy traffic, and unnecessary fees that the blockchain unfortunately has.
One of the best perks of the Lightning Network is the availability of payments and receiving them, and the fees are either extremely cheap or it’s free to use!
When & How to Use the Lightning Network
You can utilize the neat features of the wicked fast Lightning Network anytime you’d like for simple transactions with compatible participants (users who are also using the Lightning Network). This can be from anything from a drink on the go to a hip hotel that also uses digital currency; this payment method is becoming more popular and useful.
Here are the simplified steps on how to use the Lightning Network; this will take some prior knowledge of using and purchasing bitcoin, and will require the Strike App and Muun App. Once you have your bitcoin in this particular wallet, you and another party are free to open a payment channel to begin transactions as needed.
- Using the Strike App, purchase the amount of bitcoin you’d like to have available to you.
- Download the Muun App and set it up according to the on-screen directions.
- The Muun App acts as a wallet that is available to use in the Lightning Network. To begin using it for that purpose, you’ll need to transfer your bitcoins from Strike to Muun. To do this, go into your Muun app to the wallet page and click on the Receive button.
- Once you are on the receive button’s page you will be able to copy the provided bitcoin address that will be used in the Strike App.
- Open the Strike App and click on the Send button.
- Paste the copied bitcoin address in the space provided next to the number of bitcoins you want to send.
- Click send, and after a bit of time, your bitcoin will now be available in your Muun wallet and ready to use in the Lightning Network.
Benefits of Lightning Network
- Limited to no fees
- Freedom to have quick and easy transactions (much like a debit/credit card)
- Still have top-notch security
As promised, you know have a collective knowledge on the Lightning Network and can begin using it today if you so desire. You’ll know how to use it, when it would be in your best interest to utilize the Lightning Network, and the benefits of doing so.
Go out and enjoy your easy-going transactions in the bitcoin world; the blockchain thanks you for giving it a break!
This content should not be treated as investment advice. Cryptocurrency is a highly risky and speculative market.
- 5 Best Crypto Exchanges for US Customers
- 6 Tips to Keep Your Crypto Wallet Safe and Secure
- How to Calculate Profit and Loss on Crypto
- 5 Best Crypto Exchanges With Lowest Trading Fees
- What You Need to Know About Mining Cryptocurrency
- 30 Crypto Slangs Every Beginner Needs to Know
- 5 Things You Should Know Before Investing in Crypto