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What is Lightning Coin (What is the Lightning platform)

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What is Lightning Coin? The transaction fees on the Bitcoin network are implemen

What is Lightning Coin (What is the Lightning platform)

What is Lightning Coin? The transaction fees on the Bitcoin network are implemented through payment. According to CoinMarketCap data, the current network capacity of Bitcoin is 10,000,000GB, while Ethereum has only about 240,000GB, so its price can be ignored.

In the last month of 2020 (May 6th to 9th, 2021), the Lightning Wallet released a white paper explaining how it solves some problems in the cryptocurrency market, such as Bitcoin network congestion and high transaction fees. “Lightning” is described as a “fast, efficient, and decentralized payment method.” Users use this payment system to send funds to others and have them sent to another address for confirmation.

Although this is not the simplest understanding, “Lightning” is developed by a group composed of two independent entities on the Bitcoin blockchain, but their connection is very close. If the Bitcoin network fails or cannot work properly, the Bitcoin network will stop serving.

Lightning is a function similar to Bitcoin, but it is not entirely operated by miners, but executed by a node-specific smart contract. Lightning has two forms: one is a transfer that requires transferring Bitcoin to another account; the other is converting Bitcoin into fiat currency, which is called “cash”.

When users receive a transaction, these payments will be automatically converted back to the Bitcoin chain, so that users do not have to worry about their assets being lost. The Lightning Network also allows participants to purchase more BTC and other tokens from their liquidity pools. The Lightning Network is a peer-to-peer electronic cash system that includes all possible transactions that may occur, such as cashing out or withdrawing. Bitcoin holders usually choose to invest on the Lightning Network because they can get cheaper amounts than the current one and they can also cash out immediately. Due to this function, slow transaction speed and high costs make transactions very expensive.

However, the Lightning Network has a flaw, that is, its design does not have enough economic incentives, so most users in the Lightning Network do not enjoy the benefits brought by lightning as people imagine. Instead, to keep the price of Bitcoin stable, the Lightning Network adopts a double issuance model (one-tokened payments).

What is the Lightning platform

According to AMBCrypto news, Lightning is one of the most popular platforms for Bitcoin. Its main function is to allow users to exchange currency without a network, making payments more convenient and efficient. And it provides a brand new solution- using zero-knowledge proof to protect transaction privacy: allowing users to directly send funds from one address to another or receive payments (usually in the form of cryptocurrency). The Lightning Network has two options to choose from: 1. Remit to wallet providers (usually BTC-based), 2. Convert fiat currency to the Lightning Network (usually based on ETH), and 3. Solve this problem by communicating with third parties and verifying the state of the blockchain.

When we talk about what the Lightning Network is, we will first introduce the operation principle of this platform, and then explain why the Lightning protocol is important.

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