Lightning Network (LN), the payment channel network for the Bitcoin network, will have support on the Liquid side chain. This was confirmed on Wednesday, July 31, Blockstream, developer of Liquid Network. The team referred to the implementation as “experimental.”
How does Lightning work?
Lightning Network works as a payment channel and solves scalability problems. In this network, payments do not need block confirmations, they are performed instantly. The atomicity of Lightning implies that payments will be made or not, meaning that it is not possible for them to remain halfway in case of any problema within the transaction. In addition, it allows sending funds as small as 1 satoshi, without risk of custody and intangible commissions. Lightning network transactions are carried out outside the blockchain in principle, without delegation of trust or ownership, which allows users to make almost unlimited transactions between them.
New possible additions
On the Blockstream website (C-lightning major contributor) the development team reported that in a first stage the integration will allow users of L-BTC, active side chain, to transact with the Lightning Network. Then, they hope to incorporate other assets, although they did not give tentative dates for it.
On the other hand, the c-lightning team explained that it is an experimental support. On this implementation, the developers explained that “due to the similarities between Bitcoin and Liquid”, the process has turned out to be “quite simple”. Liquid Network is a Bitcoin side chain. This chain allows the issuance of assets, and its coding is based on the code of the main chain.
In the announcement, the developer team also explains why they considered the inclusion of Lightning Network in Liquid necessary, even though their transaction confirmation times are low, compared to those of Bitcoin. In this regard, they argue that it is a future bet.
The C-Lightning development team, Blockstream, also expressed on Liquid:
“While Liquid may not have the same load as the main Bitcoin network, it is likely that we will eventually reach the performance limit as well. Having Lightning available from the beginning allows us to have a solution ready for when necessary.”
Given the facts, they refer to the possibilities offered by Lightning Network for real-time payments with immediate support for invoices and payment receipts, as well as point of sale applications, micropayments and any context that requires immediate settlement. These actions would score points in favor of Lightning for facilitating faster and more efficient payment methods.
Making use of these capabilities, new cases of cryptocurrency adoption will begin to appear very soon, which will obviously have a positive impact on the market.
The Blockstream team considers Liquid and Lightning Network as two complementary technologies, that is, they can benefit each other. Exploring the combination of the potential of both was a determining factor for this new implementation, it follows from the text.
Green and atomic exchanges
The incorporation of Lightning Network in Liquid is not the only announcement made by Blockstream in the last month. Just a couple of days before, through a publication on their website, they announced the inclusion of tether the stablecoin anchored to the dollar to the chain.
Blockstream has previously claimed that Green, its mobile wallet for cryptocurrencies, would have support in the area of transactions by L-BTC, a decision that provided the service with an advantage. Recently, the company launched the Liquid Swap tool, which allows chain users to execute atomic exchanges between assets available on Liquid Network.
Such has been the impact, that some exchanges such as BitMEX are currently studying Liquid’s sidechain technology to reduce its impact on the BTC mempool and lower transaction fees. It has even been reported by magazines specializing in finance (such as Forbes) that Japan is interested in using the same technology to streamline the Blockchain transfer process.