Lightning Network has passed 1,000 active nodes and is well on it’s way to reaching 2,000 open channels as the scalability of the off-chain solution is gradually pushed upwards.
According to data collected from monitoring sources, the Lightning network, which is still in testing, has connected to 1,004 active nodes with 1,894 active channels as of 11:00 GMT. Designed to be built on top of the Bitcoin (BTC) blockchain as an off-chain solution, the network aims to speed up transactions as well as cut fees.
If the network can continue connecting to more nodes and create more active channels, it can become a viable alternative instead of wiring transactions through the actual blockchain. Founded by Thaddeus Dryja and Joseph Poon, an original preview release took place in early December 2017.
With users keeping the majority of their BTC ‘on-chain’, smaller amounts can be transferred to a lightning wallet for which parties can transfer funds to one another via lightning channels. The transactions, which in their individual units are much smaller amounts, are separate to the blockchain and remain so until the channel between the two parties is closed, by which time balances will be sent to the BTC blockchain.
The idea behind the Lightning Network is that it will make smaller BTC transactions feasible with completion taking place in a matter of seconds, rather than minutes or sometimes hours. It will also speed up the BTC blockchain as the network will only be notified with a ‘final balance’ statement following the closing of the channel which comprises multiple smaller transactions that took place on the Lightning network.
Bitcoin has had multiple issues as the network has become more widely used and this has slowed the completion for all computers, or ‘nodes’ to authorise and process transactions.
Aside from Lightning Network, Segregated Witness (SegWit) wallets, which has been progressively integrated into multiple big-name exchanges over the course of the year, effectively renders transactions smaller within the block, making BTC transactions faster and therefore cheaper to process.
Bitcoin Cash (BCH), which hard-forked from Bitcoin in August of last year, is also considered a solution to the scalability issues of Bitcoin. By increasing the block size limit, the BCH fork was designed to facilitate faster transaction speeds by a factor of eight.
In mid-February, one of the heads of Microsoft’s Identity Division, Alex Simons, said that the tech-giant preferred off-chain scaling solutions in comparison to on-chain methods. In a blog post, Simons said:
“While some blockchain communities have increased on-chain transaction capacity (e.g. blocksize increases), this approach generally degrades the decentralized state of the network and cannot reach the millions of transactions per second the system would generate at world-scale.”
An official release date for the Lightning Network has yet to be announced. According to the Developers’ website, the Lightning Network will be fully operational by the end of the year. The network reached 500 nodes in early February.
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