Lightning Network Was Used for the First Time to Fulfill Litecoin/Bitcoin Transaction

Published on 20 Nov. 2017
Img 3601

Lightning Network, introduced to Bitcoin together with Segwit, will allow users to exchange Bitcoin to Litecoin and vice versa instantly. On November, 17 the first transaction between these two cryptocurrencies was fulfilled.

Segregated Witness solution, released in August this year, has brought many exciting functions for Bitcoin, namely atomic swaps and Lightning Network. The latter is a network outside the chain which, among other things, can help reduce the load on the main Bitcoin blockchain.

Billions of transactions can be theoretically fulfilled instantly using smart contracts. The operations are performed by parties with a 10-day blocking period when the exchange can be either fulfilled or declined with the return of the money. One can watch the first transaction on the video, released by Lightning Labs, below.

Does this solution have any gaps? Only for the miners: Bitcoin miners will earn less from the transaction payments since the number of transactions will be reduced. However, it is doubtful that it will help to fight the present centralized character of Bitcoin mining. Big, controlled by the several corporations mining pools have a substantial potential influence on the Bitcoin network, comparing to the groups of really decentralized users.  

However, the approval from pool owners and mining operators has become a pivotal point to the acceptance of SegWit solution both in Litecoin and Bitcoin networks, since the activation of SegWit changes within the whole blockchain requires the united power of hash rate.

The implementation of SegWit in Litecoin happened before Bitcoin. It eventually means that Litecoin has served as a test net both for the SegWit release and the actual launching of Lightning Network code. By the way, the code was initially written by Lightning Labs for Bitcoin, but it could be realized on Litecoin as well since this coin is a Bitcoin fork.

The creator of Litecoin Charlie Lee wrote:

Think about it as of two highways: today, Bitcoin is entirely filled with cars, and Litecoin is empty. Even when Bitcoin is full, autos don’t use Litecoin road anyway, because it is not connected and inconvenient (centralized exchanges and slow chain transferring) to pass. LN LN [Lightning Network] is going to build bridges through the highways.

The potential benefits of the two cryptocurrencies working together are well summarized by the Charlie Lee’s metaphor about highways. Users need speed, and Lightning Network can serve as a communication channel, through which the level of congestion in the blockchain will drop.

The news has caused the growth of Litecoin rate – from $63/LTC to $72/LTC in three hours. In its turn, Bitcoin has grown to about $8100/BTC.

As far as the beginning of September, it was announced about the successful fulfillment of the Litecoin operation with zero commission thanks to using the Lightning Network protocol. The transaction has been fulfilled through the Zap wallet that is functioning on the base of Lightning Network. Jack Mallers, the developer of wallet, sent 0.01 LTC to Charlie Lee’s address.

More news

Blockchain Art Hackathon 2.0: technology, art and the future

Already on October 13–19, the new stage of the international project uniting art and technology will be held in Kyiv — II Blockchain Art Hackathon.

12 Oct. 2018

Verkhovna Rada Will Consider Tax Incentives for Ukrainian Crypto Market

Ukrainian parliament will consider the amendments to the Tax Code. They can potentially provide a decade of tax holidays for the members of the local digital currency market.

03 Oct. 2018

Deputies Are Still Working on Cryptocurrency Regulation Project

Ukraine is publicly finalizing the law project that will regulate the cryptocurrency space. The Verkhovna Rada deputies and the representatives of the crypto community have been working on it since February this year.

02 Oct. 2018