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What Are the 3 Things People Get Wrong About Lightning Network?
Since the development of the Lightning Network on the Bitcoin blockchain, there have been a number of criticisms offered about the nature of the layer 2 protocol. Some of this criticism is fair and will influence the decision making processes of future developments. However, there are a number of myths which unfairly attribute characteristics to the lightning network that simply aren’t true.
Today we’ll cover three things people get wrong about the lightning network built on Bitcoin.
#1. The Lightning Network Only Handles Payments
The Bitcoin lightning network is often perceived as being the cheaper and faster way to send and receive payments. Lightning network is a layer 2 network, which operates “on top” of Bitcoin. But what is generally misunderstood is that this ‘layer 2’ network can support much more than just payments. There are a wide variety of opportunities for developers to do much more than send satoshis (the smallest unit of bitcoin) at lightning fast speeds. Some applications currently in development include Impervious AI, which is an internet browser native to the lightning network.
Impervious is a great example of the potential of the lightning network. Impervious gives users access to communications apps and VPNs which keep your data cryptographically secured on a peer-to-peer network. This also paves the way for developers to create decentralized versions of popular apps like Telegram, which are branded for their capacity to keep messages secure.
Another example is LNBits, which is like WordPress for the Lightning Network. Once you create a wallet on LNBits, you can ‘add extensions’ to your wallet using which you can build your own point-of-sale system, a bitcoin ATM, or even implement LNAuth (Lightning Authentication) to enable “logging in” with your bitcoin public key for your side project.
A word of caution – the lightning network is new, experiment with any of the examples provided above at your own risk.
#2. You Need a Bitcoin Node to get Started
Running a full Bitcoin node remains the only way to maintain an accurate record of all the transactions that live on the bitcoin blockchain. A full node can be built for under $500, which is accessible for some, and costly for others. While a full-node is the only way to run your own lightning node, you do not need a full-node to access or use the lightning network. Several lightning wallets exist that allow you to make use of the speed of the lightning network, without the technical complexity. Wallets such as Muun and BlueWallet are semi-custodial options that allow you to get started using the lightning wallet within minutes of downloading the mobile applications.
Alternatively, node software such as Neutrino allows the user to download a light copy of the blockchain. Within 20 minutes you can run a neutrino node with the ability to open a lightning channel.
#3. Lightning Network Must Open a New Channel for Each Transaction
There’s a common misconception that with every transaction a new channel has to be opened and then also closed to make every transaction on the lightning network. There are a few reasons why this isn’t correct but right off the bat, if this were the case then the lightning network wouldn’t live up to its “lightning” namesake. It would be quite slow and also expensive.
In the lightning network, transactions move along already established channels, like trains on rails. The routing of these paths is handled by the network automatically. As well, channels can remain open and settle transactions. Settling the transactions is handled automatically by wallets, not the lightning network.
Conclusion: Lightning Offers Serious Utility to Bitcoin Users
To wrap up, the three things people get wrong about lightning network are that it is exclusively a payment service, that you need a full node to run it, and that you need to open new channels for transactions. While there are grains of truth in these, they are not the full story.
The Lightning Network is being used to develop a more secure and decentralized payments network outside of the settlement layer that is the bitcoin blockchain. You can run the lightning network using at least one very lightweight application.
Finally, opening and closing new channels for each individual transaction is not a necessity. Where the lightning network goes in the future is anyone’s best guess. But if recent growth is any indication of future performance, we can expect heavy use of this Bitcoin’s layer two scaling solution.
