Lightning Network Should Be Ready This Summer

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Lightning Network

Bitcoin’s saving grace for scalability (at least in the eyes of the vast majority of Bitcoin Core contributors) should be ready for use this summer.

The Lightning Network, which is a generalized network of payment channels that enables instant bitcoin transactions with practically no fees, could be live as soon as this summer. This new protocol layer built on top of the Bitcoin blockchain has received a lot of attention and hype over the past couple of years, and a fix for transaction malleability via Segregated Witness has resolved some of the code and design complexities involved with the network.

Lightning Network co-creator Joseph Poon recently supplied some comments to CoinJournal in regards to the current status of the project and when it will be available for general use. Poon claimed a functional version of the Lightning Network should be ready this summer.

Testing on SegNet

As of now, this particular implementation of the Lightning Network concept is being tested on SegNet, which is a test network for Segregated Witness. In his comments to CoinJournal, Poon stated:

“We are currently testing Lightning against SegNet. Tadge Dryja and Olaoluwa Osuntokun have been integrating Segregated Witness in our software. In fact, I believe Tadge was the first person to make a witness block larger than 1MB on SegNet 3 when testing the mempool.”

Tadge Dryja is the other co-author on the original Lightning Network white paper. Recently, Olaoluwa Osuntokun has also been working on bringing more privacy to the network for micropayments.

The code for this project is available on GitHub, and Poon added, “It should be in a testable state on SegNet 4 very soon.”

Ready When Segregated Witness Goes Live

When asked whether the Lightning Network will be available once Segregated Witness is merged into Bitcoin Core, Poon responded:

“A basic, functional version of Lightning Network should be ready when the Segregated Witness soft-fork goes live on Bitcoin, presuming it gets merged and activated this Summer. Hopefully it gets in this Summer, as this will enable entirely new decentralized use cases for Bitcoin which were not possible before on any financial system due to custodial risk underwriting.”

At the recent 2016 MIT Bitcoin Expo, Joseph Poon discussed how the Lightning Network causes people to reimagine the Bitcoin blockchain as a court for smart contracts rather than a simple payment network.

In another recent interview with Bitcoin Magazine, Bitcoin Core contributor and Ciphrex CEO Eric Lombrozo claimed a feature-complete pull request for Segregated Witness should be made available this month (April 2016). Having said that, it could take more time for that pull request to be reviewed, tested, and approved by the development community. The recently released SegNet 4 is expected to be the last test network for Segregated Witness.

Millions of Transactions Per Second

While the Bitcoin network is currently limited to less than ten transactions per second, Joseph Poon contends that the Lightning Network will enable millions (and eventually billions) of possible transactions per second. Poon stated:

“A single node on a reasonably fast internet connection will be able to process thousands of transactions per second. In aggregate across the entire network, the total capacity will be in the millions per second, even early on.”

Poon added that there may be soft-fork optimizations that could be helpful for improving the Lightning Network in the future, but the biggest constraint up to this point has been transaction malleability, which is fixed by Segregated Witness.

Update [10th April] Blockstream’s Rusty Russell has told CoinJournal that his Lightning Network prototype is also currently being adapted for SegNet 4. Russell doubts his version of the network will be available when Segregated Witness and other protocol changes implemented in SegNet 4 go live on Bitcoin’s mainnet. In terms of SegNet 4, the Blockstream Core Tech Engineer added, “It’s the last bitcoin protocol change required to make lightning a reality.”

  • I don't want to form an opinion before I try this service, but without knowing all the details it seems cumbersome for me that one needs to open a channel to be able to send bitcoins, especially that the channel has to stay open for several transactions to have any value, and it will lock bitcoins between the two of us. Would I need to use a new type of wallet for this to work as well?

    I guess it would work if I open channels between large corporations that have channels with many others, so I don't have to open a channel between every single person I want to exchange bitcoins with, but then would I have to check who is available on which channel? Hope all this will be automated.

    I think this is a great idea for businesses who exchange bitcoins daily with the same parties, but for the average person it may not work that well at least not initially.

    Regardless, I think Lightning will be a great addition to the Bitcoin ecosystem as it will relieve the network from a bunch of on-chain transactions. Also, having a bunch of Bitcoins locked up in channels will do good to the price too, so it's good for investors.

    • Lawrence

      This has crossed my mind a number of times. However it will likely be built into bitcoin wallets seamlessly, so you wouldnt even know it was in a channel, it would just appear in your wallet.

    • Matt R

      Would I need to use a new type of wallet for this to work as well?
      – Yes you will need to use a LN enabled wallet. I imagine many of the major wallets are working on integration as we speak though.
      I guess it would work if I open channels between large corporations that have channels with many others, so I don't have to open a channel between every single person I want to exchange bitcoins with, but then would I have to check who is available on which channel? Hope all this will be automated.
      – Yes it will all be automated in a relatively short time after launch.
      I think this is a great idea for businesses who exchange bitcoins daily with the same parties, but for the average person it may not work that well at least not initially.
      – Why is that?

    • The problem of locking up bitcoins for Lightning is a bit of a misnomer. It's important to remember that, while the funds are locked to the Lightning Network, you can still send those funds to anyone else on the network (and even those who aren't, though I believe this requires a bit of trust in a 3rd party).

      It will all be automated. The Lightning guys are working on a powerful API.

      It's important to remember that this is a generalized network for payment channels. You should be able to transact with anyone else on the network (as long as there is a route between connecting nodes).

      The way you are describing Lightning is not how it works. The way you are describing it is actually already possible. Coinbase could have payment channels with their users today in a more centralized model like that.

  • earonesty

    Total Cost = Number of Nodes * Hosting Costs + Total Coins Used * Risk Adjusted Interest Rate
    Fee = Total Cost / Number of Transactions

    You can plug in whatever estimates you want for those numbers. But it doesn't come out to "practically zero". Might be free for users, since people will sponsor nodes. But not zero cost. The network has to be secured.

    http://www.reddit.com/r/Bitcoin/comments/4dn6u7/lightning_network_fees/

  • thirdalbum

    We'll have Lightning Network "by summer", just like we were going to have SegWit "in April"?