Posted: 30.06.2021 | 04:46
What is Lightning Network?
THE SOLUTION TO THE SCALE PROBLEM OF BITCOIN
One of the most important solutions to Bitcoin's scale problem is the mechanism called lightning network. On average, 7 transactions per second can be made in Bitcoin, and the average cost of a bitcoin transaction is 1 dollar. On the other hand, Visa, for example, can process 1,700 transactions per second. When you make a Bitcoin transaction, the network must approve this transaction. Network here means miners. In Bitcoin, 6 approvals are passed in each approval process.
On the other hand, the average time to mine each block on the Bitcoin Blockchain network is 10 minutes. Therefore, each transaction can take up to 60 minutes, depending on the density of the network. As the cryptocurrency ecosystem grows, it is predicted that the number of Bitcoin transactions will increase and the network will become more congested, thus increasing the time in question. This is where the "Lightning Network" comes into play. First introduced in 2015, the lightning network refers to a second layer on the Bitcoin Blockchain network and is a mechanism that performs the direct exchange of Bitcoin to another person in a way that eliminates confirmation. It takes the Bitcoin transfer out of the network, eliminating the need for each transfer to be recorded on the Bitcoin Blockchain network. In this way, transactions can be carried out very quickly. The Lightning network allows payments to be made between two or more users using channel networks.
The fees of the lightning network are also quite low. Despite the high commissions that have to be paid, especially for small amount transactions, the lightning network is competitive. The continued growth of the Bitcoin network will cause the importance given to small amount transfers to decrease and the relative cost to increase. In this case, the lightning network is expected to be a solution to reduce the traffic on the Bitcoin network.