The thrilling fact about the decentralised economy is that technology always evolves and develops in response to ongoing issues. Ultimately, these tools were innovated to better serve users and provide better facilitation than centralised methods.
The Bitcoin blockchain was the first network developed to register and track crypto transactions using BTC and other tokens minted on the same network. However, due to the increasing demand and congestion on the blockchain, the lighting network was introduced to solve this problem.
Let’s discuss exactly what the Bitcoin lightning network is and how it solves the blockchain performance problem.
What is Lightning Network in BTC Blockchain?
The Bitcoin lightning network is a layer-2 scaling solution developed on the BTC mainnet to offload the network congestion. The Bitcoin network has become highly demanded, and its fees have increased over time due to coin capitalisation and its role as the first and best cryptocurrency.
This innovation was developed to fix the speed and scalability issues of the blockchain network by processing payments, operating digital assets and executing transactions on the LN instead of the mainnet. The BTC main network can be used to register new blocks and add/release newly minted Bitcoins to miners.
This protocol helps avoid congestion time and increased gas fees that occur during network peak times, where transactions take a long time to be processed, and transaction fees can exceed $50 per payment.
How Does Bitcoin LN Work?
The lightning network happens directly between users with minimum interference from the blockchain’s main operators. This peer-to-peer transaction contributes to faster payment settlements and decreased fees.
Operations processed on the layer-2 network minimise the workload from miners, which reduces its security exposure. Transactions processed using LN technology are settled faster, which minimises the risk of being targeted by hackers while being processed or in the pending…
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