When routing a payment, you may run into issues with liquidity in channels, and to solve this, a concept called multi-path payments comes into play. Think of channels like money tubes they can all accommodate different size payments if the tubes available aren’t large enough, the payments will fail. When you spend satoshis or receive them on Lightning, you’re routing them either through your channel if you have a direct channel or through multiple channels if you don’t have a direct channel. When you create a Lightning channel, you lock funds from the base chain into a digital contract that allows you to spend those satoshis on Lightning. The Lightning network will attract more capital if the reward to do so is there with time, as it proves stable and more reliable, more bitcoin holders will be confident enough to use it regularly. Still, if it’s going to scale and meet the growing demand for payments, even with a lack of liquidity, it needs to become a more dynamic system.īitcoin is a savings technology, and most people are keen on holding their funds in cold storage, where Lightning requires you to keep your funds hot to use it that means you’re putting funds at risk, and very few people want to risk large amounts of bitcoin. ![]() The Lightning Network has made considerable ground as a micro-payment service. Building a payment network on top of the bitcoin base chain that has the potential to scale and route millions of payments in a private and decentralised manner is no easy feat.
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