x
Bitcoin has a 7 transaction/second limit, so how can we overcome this? The Lightning Network is one of the proposals - this video explains how it works.
Lightning is a decentralized network using smart contract functionality in the blockchain to enable instant payments across a network of participants.
The Lightning Network is dependent upon the underlying technology of the blockchain. By using real Bitcoin/blockchain transactions and using its native smart-contract scripting language, it is possible to create a secure network of participants which are able to transact at high volume and high speed.
Transactions for the Future:
Instant Payments. Lightning-fast blockchain payments without worrying about block confirmation times. Security is enforced by blockchain smart-contracts without creating an on-blockchain transaction for individual payments. Payment speed is measured in milliseconds to seconds.
Scalability. Capable of millions to billions of transactions per second across the network. Capacity blows away legacy payment rails by many orders of magnitude. Attaching payment per action/click is now possible without custodians.
Low Cost. By transacting and settling off-blockchain, the Lightning Network allows for exceptionally low fees, which allows for emerging use cases such as instant micropayments.
Cross Blockchains. Cross-chain atomic swaps can occur off-chain instantly with heterogeneous blockchain consensus rules. So long as the chains can support the same cryptographic hash function, it is possible to make transactions across blockchains without trust in 3rd party custodians.
For more information - check out the Lightning Network website.
Video produced and simply explained by Xavier Decuyper - Check out more Simply Explained videos on YouTube.
Disclaimer: This video and article are provided for educational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
