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The Lightning Network, What Is It. And How Will It Leverage Bitcoin to Buy Your Coffee Before It Gets Cold.

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The lightning Network

Wouldn’t be great to have instant and feeless transactions! This is where the lightning network comes in.

Introduction

The lightning network is sets of protocols that are built on the top of the bitcoin blockchain, to facilitate the micro payment or small transactions.

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The concept was first introduced in 2015 and it is credited to two brilliant developers. Tadge dryja and joseph poon, who first pend their white paper at the annual bitcoin conference in San Fransisco where they met a year before.

The main idea behind their fast payment solution (The lightning network) was that, A small transactions don’t need to be recorded directly on bitcoin blockchain but rather “Off chain”. Which provides all the beneficial bitcoin has and without its drawbacks.

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Technical gibberish

Bitcoin is no where close to the optimal speed of transactions, because of its block size and block time!

Let me explain! The bitcoin network is a blockchain which is a distributed record of transactions. These transactions are shared by all computers connected to the network. These transactions are batched into blocks which are only 1 MB large.

If we consider, the btc transaction which has a digital size 2. Only, 2700 transactions can fit in each block. This limited space is the reason why there was a need for transaction fees. In order to incentives computer or miners to include transaction in the next block.

When We divide the number of transactions in one block, and the time for creating a new block which is roughly 10 minutes. We got 4-7 TPS (Transaction per second) which could be handled by the bitcoin network.

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With those facts, you might be thinking that the solution for a scalable and fast bitcoin network, would be to increase the block size, the block time or both. But here is the issue!

If the block size is too large, there would be a handful of computers that would be able to store the full history of transactions and would be too large for most of computers to handle, on the other hand, same if we increase the time of creating new blocks. For the same reason, there would be less computers that are able to verify transactions on time.

This leads finally to one solution left. Which is the off chain or the lightning network. Which suggest simply to process btc transaction outside of the Bitcoin network. Or what we call off chain without compromising security or increasing costs.

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