合约交易平台

Bitcoin, as the earliest and most well-known cryptocurrency, is designed to ensure decentralization and security. However, with the growth in user numbers and transaction demands, the Bitcoin blockchain faces challenges in transaction speed and fees. Due to the limited size of each block, the number of transactions that can be processed on-chain per second is restricted. When transaction volumes are high, confirmation times increase, and transaction fees rise, making small daily payments impractical.

OKX cryptocurrency trading platform, register with a dedicated link to enjoy a 20% lifetime fee rebate!

OKX registration: https://www.okx.com/join/BITCOIN369 (click the link to register)

Binance registration: https://www.binance.com/join?ref=BITCOIN369

Domestic registration installation package download: https://96927.cc/

To overcome these bottlenecks, various scaling solutions have been proposed, among which the Lightning Network is currently one of the most focused on and adopted Layer 2 technologies. It does not modify the base protocol layer of Bitcoin but builds an additional layer on top to handle a large number of transactions. The design goal of the Lightning Network is to significantly enhance its payment processing capabilities without sacrificing the core decentralization and security features of Bitcoin.

What is the Lightning Network

1. The Lightning Network is a decentralized payment layer built on top of the Bitcoin blockchain.

2. It is classified as a Layer 2 scaling solution, meaning it adds functionality without modifying the underlying Bitcoin protocol.

3. The Lightning Network is primarily used for fast, low-cost small Bitcoin payments.

4. Most transaction processing occurs off-chain, significantly reducing the burden on the Bitcoin main chain.

5. It consists of interconnected payment channels, forming a payment network.

Payment Channels and Their Operation

1. Payment channels are the fundamental building blocks of the Lightning Network.

2. Two users can jointly open a payment channel through an on-chain transaction, locking a certain amount of Bitcoin in a multi-signature address controlled by both parties.

3. Once the channel is opened, both parties can conduct nearly unlimited transactions within the channel, which are executed by updating a shared ledger held by both.

4. Off-chain transactions are completed by exchanging and verifying transaction commitments signed by both parties, which represent the current latest balance distribution of the channel.

5. Only the opening and final closing transactions (or dispute transactions) of the channel are broadcast to the Bitcoin main chain and recorded on-chain.

6. If user Alice wants to pay Bob, and there is no direct channel between them, but both have channels with Carol, then Alice can route the payment to Bob through Carol, which is called multi-hop payment.

7. The entire payment network consists of these interconnected channels, allowing any two users in the network to theoretically make payments through intermediate nodes.

What is the Lightning Network? Detailed Explanation of Bitcoin Layer 2 Scaling Technology - PHP Chinese Network

Advantages of the Lightning Network

1. Extremely high transaction speed: Transaction confirmation speeds within the channel are nearly instantaneous, significantly reducing waiting times.

2. Extremely low transaction costs: Off-chain transactions themselves incur almost no fees, only requiring payment for the on-chain fees to open and close the channel, along with a small amount of network routing fees.

3. Enhanced transaction privacy: The details of transactions on the Lightning Network are not broadcast on the public Bitcoin blockchain, being visible only to participants and routing nodes.

4. Significantly increased transaction throughput: Since the vast majority of transactions are processed off-chain, the Lightning Network can theoretically handle transaction volumes far exceeding the capacity of the Bitcoin main chain.

5. Enabling new use cases: Low costs and high speeds make Bitcoin viable for micropayments and streaming payments.

Comparison of On-chain and Lightning Network Transactions

1. On-chain transactions: Each transaction is permanently recorded on the Bitcoin public ledger and verified by nodes across the network. Its security is the highest, but it is limited by block capacity, slower, and has high fee volatility.

2. Lightning Network transactions: Most transactions occur within payment channels and are not broadcast to the main chain. They are fast and low-cost.

3. Finality: On-chain transactions have strong finality once fully confirmed. Lightning Network transactions achieve finality when the channel is closed and recorded on-chain.

4. Security mechanisms: On-chain transactions rely on proof of work and network consensus. The Lightning Network relies on Bitcoin smart contracts (such as time locks, HTLC) and on-chain enforcement rules to ensure the security of off-chain transactions and prevent one party from cheating.

5. Network impact: On-chain transactions occupy block space and network bandwidth. Lightning Network transactions significantly reduce the consumption of main chain resources.

This is the detailed content of what is the Lightning Network? Detailed Explanation of Bitcoin Layer 2 Scaling Technology.