Bitcoin Lightning – scalability unleashed. This text explores various strategies to enhance the speed and efficiency of Bitcoin’s blockchain technology. Imagine you have a task: to speed up the blockchain. Propose a solution that will have all the attributes of the blockchain (decentralization, openness, security, and immutability) and will be faster, process more transactions. Bitcoin has been looking for the optimal way for years. Shall we try?
Bitcoin Lightning – Solutions and Limitations
If a block in Bitcoin is created every 10 minutes and has a certain size, then maybe we speed up its creation and increase the size of the block? Well done – you’ve designed Bitcoin Cash (https://bitcoincash.org/), which increased the block size to ~32MB. Unfortunately, the Bitcoin community rejects your idea because the solution cannot change network parameters. These in the protocol cannot change; otherwise, the protocol would not be “immutable” (and that’s the basic idea of Bitcoin).
Exploring Alternative Avenues
Okay, so maybe transactions can be smaller? Unfortunately, we have already achieved mastery in terms of data minimization, cryptography, and optimization of the current Bitcoin architecture. Revolutionary changes cannot be made to avoid causing a hardfork. So maybe since Bitcoin is overloaded, let’s process some transactions on another blockchain, create Bitcoin 2. Okay, this is currently a fairly popular idea, the approach of so-called sidechains (Bitcoin’s Liquid sidechain https://liquid.net/), or a big trend in Ethereum called rollups (optimistic rollups, zk-rollups). However, it has a lot of challenges: you create a new blockchain/network, a new ecosystem and there are a lot of elements to design (e.g., in terms of security). Moreover, this solution has its limit. Eventually, this Bitcoin 2 will start having performance issues and then what, will we create such Bitcoins indefinitely?
Bitcoin Lightning – Innovative Long-term Solutions
The greatest minds of the Bitcoin community have been looking for a long time for an idea that would be a long-term solution to the Bitcoin scalability problem and thus the Lightning Network was created. It is a network of payment channels where users perform cryptographically secured Bitcoin transactions but publish them on the blockchain only twice, when opening the channel and closing it. No matter how many transactions were in the channel, only the initial and final balance is recorded on the blockchain. LN is a decentralized network of nodes, where the ultimate guarantor of correctness is the blockchain, and communication between participants is secured by advanced cryptographic constructions (HTLC). This is a network that does not have limitations stemming from the structure of the blockchain, and the number of transactions it can process is hundreds of thousands per second. The network delivers value and has its own economy, making people willing to create it.
Conclusion
Bitcoin Lightning – scalability unleashed.While there are multiple approaches to improving Bitcoin’s scalability and transaction speed, each comes with its own set of challenges and limitations. The Lightning Network represents a significant step forward, offering a sustainable, long-term solution without compromising the foundational principles of blockchain technology.
I design and build enterprise IT solutions based on blockchain technology.
I am blockchain architect in Trans.eu building ECMR (digital CMR Consignment Note) based on blockchain. I teachabout Bitcoin, blockchain and decentralization via Linkedin and blog: https://mobycrypt.com.
