Bitfinex CTO: Beyond Congestion Resolution, Lightning Network Applications Broad

At the beginning of 2019, the "lightning torch" was passed on 6 continents and was ignited in 37 countries. Lightning Network ushered in its beginnings at the beginning of the year. At the end of 2019, the digital currency exchange Bitfinex announced that it supports Lightning Network's deposits and withdrawals, becoming the first mainstream exchange to support Lightning Network. Some people predict that 2020 will be the year of the lightning network explosion. Why exactly is Lightning Network sacred? What are the opportunities and challenges in the future? On the evening of December 27, we invited Bitfinex CTO Paolo Ardoino to be a guest chain node AMA, and had wonderful questions and answers on the real advantages of Lightning Network, future development trends, and how ordinary users use Lightning Network.

Lightning Network (LN) 's expansion of Bitcoin is already a remarkable achievement

LN put most of the transactions down the chain to achieve, achieving a qualitative leap in the transaction speed of bitcoin, and aggravating the "currency attribute" of bitcoin to a certain extent. In the recent chain node community's "If the Lightning Network is deployed, can Bitcoin be a daily payment tool?" Nearly half of the people in the voting post were positive about the idea that the Lightning Network helps Bitcoin become a daily payment method Can be achieved or indicates that you want to try).

LN solves the problem of bitcoin congestion to a certain extent, which will also enable e-commerce to make payments and settlement through LN. On this basis, Paolo said that Bitfinex and Tether are funding the development of LN-based protocols to create digital asset technology on top of LN. This will allow potential atomic exchanges, cross-border remittances, and true peer-to-peer cryptocurrency transactions on LN. Speaking about the infinity of future development, Paolo added:

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LN's expansion of Bitcoin has been a remarkable achievement. It is important to keep the underlying simple and clean, and it is also necessary to do so (before Bitcoin) is adopted on a large scale. Most payments and daily use of Bitcoin users need to be done on the sidechain and LN. Since Bitfinex and Tether funded a group of developers to create an LN-based protocol to create digital assets on top of LN, I thought that cross-border remittances, e-commerce shopping, local merchant integration, P2P exchange, cloud services and other services could be established in On top of the LN protocol … LN integrated a protocol update a few days ago that allows text messages to be passed through nodes. This opens up possibilities for some new P2P applications, such as decentralized P2P chat (think whatsapp or WeChat, etc …). The possibilities are truly endless. It's like building a crypto (currency) protocol layer on the Internet.

The future development of LN is full of various possibilities, but for now, it is still in the early development stage. Although it has not encountered major security issues to date, technicians are working to further improve its security. However, due to its immaturity, it is inevitable that there will be some limitations in the current application-Paolo pointed out that based on the current stage of LN, in order to provide the most secure and reliable service to users as much as possible, Bitfinex respects the proposed limit proposed by developers value. But he is equally convinced that the channel limit will increase in the future. Regarding the future development speed of LN, Paolo believes that there are many different available solutions for cryptocurrencies to send large amounts of money, which has earned time for LN's subsequent experiments and development. As for LN's eagerness to quickly achieve success, he emphasized that "what we want is a product that can be considered as a work of art rather than rushing to deliver it to the community to get started quickly."

Exchanges should maintain their role as technology leaders and supporters

Not long ago, Bitfinex announced support for LN deposits and withdrawals, becoming the first mainstream exchange to support LN =. Prior to this, Bitfinex has successively launched SegWit Segregated Witness, Bech32 address format, and Liquid sidechain support, which can be said to be an exchange at the forefront of technology. In this regard, Paolo said that most of the daily work of many exchanges is in the battle for listing or marketing. Although these are indeed important, and customers are always happy to trade new digital assets, it is equally important that exchanges also maintain their role as technology leaders and supporters.

For the support of new technologies, Bitfinex has been doing it by itself. After announcing its support for LN, many people in the industry said that more exchanges will keep pace in 2020 and the infrastructure of Lightning Network will be improved. Some people have speculated that 2020 will be the year of the lightning network explosion. Back in 2019, at the beginning of the year, the community had high expectations for LN, hoping to promote the development of micropayments and set off the next bull market. However, as the market moves, the number of transactions on the main chain continues to decline, and the growth in the number of LN nodes and network capacity also tends to stagnate. Why did Bitfinex choose to support Lightning Network at this time? Paolo stated:

First of all, I don't think 2019 is a bad year in terms of BTC currency price. (So ​​far) it has basically doubled. Of course, some bitcoin supporters are always very eager to see a major breakthrough that can lead to price increases every month. Sometimes great things take more time than people expect. The Lightning Network is one of them. I believe that as the Lightning Network becomes more reliable in the production environment, more new businesses will be realized on it, and (Bitcoin) halved, these things will add up to the Bitcoin price in 2020 Tremendous influence.

Regarding the number of LN nodes, it did stop temporarily, but one point I can be sure of is that as technology advances, we also need to work harder on user education and experience. We need to let people know how to run their own node at home, how to install it on a Raspberry Pi and connect to other nodes. It takes time, but it will eventually happen.

Bitfinex loves technology and Bitcoin. We naturally integrate early technologies that have the potential to impact the revolution our industry is trying to bring.

Equally enthusiastic about technology and bitcoin is the holders of bitcoin, that is, users of the exchange. After talking about the development and breakthrough of technology, we return to the question that users are most concerned about: How do ordinary users use LN? How does Bitfinex promote LN to ordinary users? Paolo replied:

Ordinary users can download wallets like bluewallet, then test send 0.0001 BTC to Bitfinex and propose it. Feel the difference. When you send a transaction on an ordinary blockchain, you know that the transaction has been broadcast to the memory pool and will eventually be included in the block for confirmation. When you send an LN transaction, you can think that your transaction is being forwarded between many nodes and eventually reach its destination. This experience has an inherent sense of freedom and power. Bitfinex will share daily knowledge of LN and deeper technology and product philosophy with customers and the entire crypto community through teaching articles and videos.

In summary, LN is currently at a young stage. Although development researchers are working to improve and expand its safety and applicability, there are still limitations in current applications. Of course, there is still a long time for LN to grow and develop. With the support of exchanges such as Bitfinex, the concern of users, and the enthusiasm of the community, LN will eventually develop into a mature state. To borrow Paolo's words to summarize-"(about LN) I certainly agree that it will accelerate development in 2020".

For a detailed review of this issue of AMA: https://www.chainnode.com/ama/401077

Look around for more big talk LN: https://www.chainnode.com/forum/299

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