One of the latest advancements in the crypto space is the Lightning Network. Most people have heard about the various advantages of payments through the lighting network - mainly the high transaction speeds, direct confirmation, and payment settlement, besides marginal transaction fees. Besides, the Bitcoin blockchain lighting network is not just budget-friendly but also scalable. Consequently, applications with small payment amounts and a high number of transactions would be achieved in our technically efficient way. Also, users can easily use the lightning network to make payments around the clock independent of banks or any other regulatory intermediaries.
However, nowadays the lightning network is being used for more than just payment purposes. Let us find out how.
But before going there, we first need to know What is the Lightning Network.
Bitcoin lightning network - Explained
The lightning network is a second layer that is added to the Bitcoin blockchain, which allows the off-chain transaction, which is the transaction between parties not on the blockchain network. Multiple payment channels between different parties or Bitcoin users make the second layer. A lighting network channel is mainly a two-party transaction method where the parties can make or even receive payments from one another. Layer two also improves the scalability of blockchain applications by managing transactions outside your blockchain layer one.
How else are people using the Bitcoin lightning network?
E-commerce payments
The payment process in the online store is completely optimized to motivate the clients to make a purchase. Online stores have a better interest in offering a vast selection of payment alternatives payment with Bitcoin appeals to new, typically young customer groups already own the Bitcoin lightning payments are especially noteworthy in this context it is because lighting payments already offer a comparable user experience to standard payment methods besides the user experience instant payment confirmation is also vital of minimizing the risk for the margins. Payments with quick payment confirmation reduce the counterparty risk, ultimately resulting in low expenses for the merchant and, typically, end users.
Besides typical eCommerce payments, some websites also use a lightning paywall. This lightning paywall gives content providers the perfect ability to have the content accessed in exchange for the Bitcoin lightning payment. Search websites benefit from the monetization option from an ever-growing number of content providers.
Lightning chat
The lightning network was basically covered by chat. Even the original intention of the project, the way the lighting network is structured, allows it to be the base of the online chat network between different nodes. As mentioned in terms of chat, that's one of the most emerging use cases, which is an entertaining debate as to whether that can scale and how people are running nodes to hold. Lightning chat apps are built on top of somewhat recent protocol changes that make it very easy to attach extra information to the payment.
Furthermore, they offer end-to-end encryption, which advocates lightning-powered messaging apps. They claim they can also provide a great degree of resistance to censorship and tracking what is found in typical centralized encrypted messaging apps. One of the best parts about this community is that it's OK, and here is the challenge can lightning be used for the chat, or should it be used for the chat?
Lightning DeFi
Another emerging demand for the lightning network is lightning DeFi which these projects are built on. DeFi Means decentralized finance, and it represents movement majorly on the Ethereum network to replace all the functions of the typical financial institutions with decentralized systems. There have been several interesting discussions on the lightning network development mailing list recently regarding using discrete log contracts to build new exciting assets on the top of the lightning network.
The lightning network is basically a web-shaped network of different underlying payment channels as a core element in the second layer. The main selling point for the lightning network includes instant payment scalability and low fees. After each payment, the current balance would be recorded in the commitment transaction, which has to be signed off by both parties, and the idea is based on a concept similar to the current account in specific commercial law.
