The Lighting Network protocol dramatically improves the scalabilty of blockchain currencies like Bitcoin by streamlining the number of nodes involved in each transaction. A typical on-chain Bitcoin transaction is transmitted, verified and stored by many thousands of nodes. This can mean significant fees and delays for users.
Lightning Network transactions involve a small group of nodes that link sender and receiver. These nodes are connected via "payment channels" established on the underlying blockchain. Payment channels leverage blockchain smart contracts to enable virtually unlimited cheap, fast transactions.
A "channel" is essentially a virtual money tube that connects peers within the network
To create a channel, two participants assign funds on the blockchain into an entry which requires both parties to sign off in order to move funds to/from the entry. This requires a single on-chain blockchain transaction
To transfer money, both participants exchange digital signatures directly with each other every time they want to update their balance in this local off-blockchain “channel.”
The most advanced and most developer-friendly implementation of the Lightning Network protocol, lnd provides superior reliability, interoperability and security for the next generation of global-scale financial applications. lnd leverages the concurrency, performance and efficiency features of the Go programming language and also has an active and passionate community of developers and users who are contributing to the further development of our industry-leading financial infrastructure platform.
An open platform developed by Lightning Labs that enables users with mobile devices to conduct blockchain and Lightning Network transactions quickly and easily. Neutrino provides “light clients” with security and privacy that weren’t available with previous light client concepts (such as Bitcoin’s BIP 37 bloom filters). The coming availability of Neutrino promises to dramatically improve both safety and usability for typical blockchain users on laptops, tablets and smartphones.
With a practical, low-cost metered payment system for continuously delivered services (such as bandwidth, storage or streaming content), Lightning can enable more efficient service delivery and foster new business models.
By making it fast and cheap for traders to deposit and withdraw currencies from exchanges on an order-by-order basis, Lightning can minimize the funds held by exchanges, decreasing custodial risk for both users and exchanges.
Can support high-volume transactions without significant infrastructure and networking costs.
Lightning is developed in the open, all specification and related source code are open source. Contributors are welcome!