When Bitcoin was initially launched using blockchain technology one of the main objectives was to make financial transactions faster and more economical. During the last 18 months as the price of bitcoin has skyrocketed, investors have focused more on bitcoin as a means to get rich quick.
Lightning Labs, a software developer recently announced the launch of its latest software called “Lightning Network Daemon (lnd)’ which has been designed to make Bitcoin payments a lot cheaper and faster.
After a year of testing and development, lnd was finally released in the public domain.
The initial version will be compatible with networks created by other groups like Acinq and Blockstream. The release of this software comes at the right time as the exponential growth of bitcoin has been good for the cryptocurrency industry but has also caused bitcoin payments to become incredibly slow and highly expensive.
The sudden popularity of bitcoin and the exponential increase in bitcoin transactions saw a sudden spike in transaction fees. A number of bitcoin users have complained in recent times that they were paying a transaction fee as high as $50 and often had to wait for close to a week for a bitcoin transaction to be successfully completed. This has frustrated bitcoin users who expect bitcoin to live up to its initial promise of being a fast and cheap alternate to fiat money transactions.
Lightning Labs Promises Instant Transactions And Low Fees
Lightning Labs promises to change the current trend of bitcoin transactions. lnd works by allowing Bitcoin users to open direct payment channels to each other. This allows the two parties to transact with each other, without posting to the blockchain. The blockchain is the main reason for delays and increased transaction costs. When the transactions are done, that is when the balance is recorded on the blockchain. That is also when the Bitcoin fees are paid. The important feature of this is that the payment channel can stay open for a long time without closing, allowing for multiple Bitcoin transaction.
The founder of Lightning Labs founder and its CEO, Elizabeth Stark, thinks that merchants and online business will be the main customers for the network. With the high volume of transactions and the need for low transaction fees, lnd is an attractive piece of software to these merchants. Exchanges can also use it to make their deposits and withdrawals faster.
In a statement, Stark said
Bitcoin enthusiasts have gotten excited about this, merchants are excited about this. It feels like we're right on the edge of mass cryptocurrency adoption
