Litecoin and the Lightning Network: A Quick Overview
Litecoin has the same scaling issue as all elite cryptocurrencies like Bitcoin and Ethereum will eventually face in the future as transaction volume increases along with popularity. VISA currently handles about 24,000 transactions per second. In order to be a viable digital currency for payments, Litecoin must be able to scale to VISA like levels.
The Lightning Network is the answer to that problem. The Lightning Network is considered a layer 2 solution to the problem of scaling, not increases of block sizes. According to the LN website, it will be capable of millions, if not billions of transactions per second across the network.
Litecoin handles around 60,000-70,000 transactions every 24 hours. This would be around 2,659 on average per hour. That just isn't enough for the lofty goals of Litecoin adoption. The Lightning Network, being a layer on top of the blockchain only requires broadcasting to the blockchain when opening a payment channel and closing of a payment channel. Within that payment channel millions of transactions can occur, and theoretically, there will be payment channels open permanently for established businesses that accept cryptocurrencies as payment options.
The Lightning Network is being developed with Bitcoin as the focus, but Litecoin is vital and is helping test features. The Bitcoin testnet was used to conduct a cross-chain atomic swap between Bitcoin and Litecoin in November of 2017. A huge success and proof of concept! The Lightning Network protocol 1.0 was released in December of 2017. This led to the beta version of the ZAP wallet in January of 2018. The ZAP wallet by Jack Mallers makes it so much easier for the average user to be involved in testing and experiencing the Lightning Network like never before!
In just under a month after the Bitcoin LN testnet was operational, at the end of 2017, more and more crypto enthusiasts were getting involved and began to use the Bitcoin mainnet. A very risky endeavour due to the real money and real consequences that are involved. By January of 2018, the LN mainnet had 29 nodes. The Bitcoin LN testnet currently has 2,582 nodes with 7,734 payment channels open.
As of this writing, February 15, 2018, the Bitcoin LN mainnet has increased substantially. The current statistics are:
- Lightning Network Nodes: 719
- Payment channels: 1582
- Total Capacity: 470,926,352.00 sat ($47,463.21 USD)
This is a huge milestone! While the Lightning Network is still in early stages, it is operational in the wild on the Bitcoin mainnet. The testnet is easier to access with less consequence by downloading the main Lightning daemon and then installing the ZAP wallet. Access the testnet and have some fun! You will probably have to run the .exe for both LN and ZAP at the same time, but it will work! Some great links are below.
- Testnet explorer
- Mainnet explorer
- Lightning Network website
- Lightning Network Developer resources
- Lightning Network Mailing List
Please remember that the ZAP wallet does have Litecoin support and the Litecoin development team is hard at work developing the Litecoin Core wallet to interface with the LN. 2018 will be a huge year for Litecoin adoption with the #PayWithLitecoin campaign. The Lightning Network could not be coming at a better time!