The Lightning network, which facilitates low-fee and instant transactions in Bitcoin, reached a new milestone recently. Since October 3, the number of currencies (BTC) blocked in this protocol exceeds 3,000.
The increase in BTC deposited in that network of payment channels, which functions as a second layer of Bitcoin, was close to 27% in a month. At the time of writing this article, as seen in the CryptoNews Price Calculator, 3,000 BTC equals about $ 150 million.
Those numbers, in conjunction with other metrics among which is the number of open channels (71,156) and the number of nodes (16,098), highlight the interest of Bitcoin users to carry out fast and cheap shipping with the pioneer cryptocurrency.
To understand what the milestone of 3,000 BTC blocked on the Lightning network means, it is necessary to define what is a payment channel. According to the Criptopedia (educational section of this news portal) a payment channel is defined as follows:
‘Off-blockchain means of transaction, in which two people commit funds in one direction and pay each other by issuing payment commitments signed by the parties. This avoids having to wait for confirmations on the underlying blockchain.
Criptopedia, educational section of CriptoNoticias
When it is necessary to send BTC through the Lightning network, the interested parties open a channel between them. To do this, they send coins in an initial transaction to a multi-signature address managed by both participants. When this happens, the sending of BTC spreads in the blockchain and, in this way, the opening of the payment channel is established.
Additionally, participants create transactions from the multi-signature address, such as off-blockchain operations. Once the channel is open, it is possible to carry out transactions between the participants at any time, as long as that channel exists. This only closes once one of the participants wants to settle their BTC back on the main Bitcoin network.
Users of the Lightning network only pay commission to Bitcoin miners when entering or exiting the mentioned payment channels. Instead, within these, can move with reduced rates (around 1 satoshi, which is the minimum unit in which a BTC can be divided) and without the need to wait several minutes for network confirmations.
Bitcoin wallets make it easy to use the Lightning network
The process of opening and closing payment channels may seem complex, but the user experience is facilitated by purses that run it “behind the scenes.”
Among the non-custodial options the Muun purse stands out, created by a team of developers from Argentina. There are also escrow wallets (that is, they do not offer the user access to their private keys) that are compatible with the Lightning network, for example, Wallet of Satoshi.
Regarding the subject discussed here, Darío Sneidermanis, Muun’s developer, explained months ago in an interview with CriptoNoticias: “With Muun, you don’t need to think about opening channels. The portfolio will take care of opening the channels that are necessary, if necessary.