As an innovator in the space, CXIHUB is always experimenting with new features and is the fastest exchange to bring in new technologies to its users.
CXIHUB is now working on integrating lightning network to its interface, adding lightning network functionality is extremely beneficial for the users as they benefit from low transfer fees and instant bitcoin transfers. The lightning network mainnet was released recently on 15 March.
CXIHUB has taken a lead in exploring lightning network not only in India but Globally as only a few firms have integrated this platform yet.
Why do we need the lightning network?
Lightning network is a protocol that overcomes some of the most major shortcomings of Bitcoin.
High Fee: Bitcoin currently is expensive for transferring small amounts of money, for eg. If I want to transfer a dollar to somebody the fees that I would have to incur would be higher than a dollar itself.
Delay: Secondly transfers take time, currently more than 30 minutes (waiting for 3 confirmations on a transfer).
The Lightning Network Protocol overcomes all these obstacles making bitcoin a desirable currency even for small and immediate payments (micropayments).
The Lightning Network is most important at this point of time as Bitcoin faces huge backlash for becoming a currency that is hard to transmit due to high fees and slow confirmations.
The Lightning Network by removing these shortcomings of Bitcoin confounds the rationale of many alternate currencies, therefore many alt currencies may fail as their value is absorbed by Bitcoin once again.
So how does the lightning network work?
Check the original paper here
Before getting to this let’s clarify some terms
Multi Signature wallet: A wallet through which payment can be made only when all parties involved approve.(can be more than two)
Smart Contract: An auto executing code which executes when a certain requirement is met.
When two party suppose BOB and ALICE want to pay each other they start a payment channel which is nothing but a multi signature wallet in which they keep some funds suppose 1 BTC. Now both parties can send BTC to each other totalling to 1 BTC.
These transactions will not be recorded on the Blockchain until the payment channel is closed. A smart contract is formed to execute automatically in case any user tries to “cheat” thus closing the payment channel.
Yes, it is this easy, in real life you need not even open a payment channel and can use an existing payment channel, as shown below Alice trades with Dave through Bob and Carol.
Check out this video to better understand how transacting works in the lightning network.
Explore current bitcoin nodes
The benefits of the lightning network are numerous and clearly visible. It is for this reason that CXIHUB India’s best cryptocurrency exchange is set on integrating the lightning network as soon as possible. Soon you will be able to avail the lightning network wallet on CXIHUB.