![\"Lightning-Network-what-is\"](\"https:\/\/alfacash.blog\/wp-content\/uploads\/2022\/04\/technology-4256272_1920-1024x683.jpg\")
<\/figure><\/div>\n\n\n\nSo, for example, Alice and Bob can agree to open an LN channel anytime with a certain amount of funds to exchange between them (or their friends with LN nodes). They can set an \u201cexpiration date\u201d, and make commitment transactions while the channel is open \u2014it can be an hour, a day, a month, a year, etc. When they agree to do so, they\u2019ll close the channel (and register it on the blockchain, making it irrevocable) with the final balances for each party.<\/p>\n\n\n\n
Why is it necessary the Lightning Network?<\/strong><\/h2>\n\n\n\nCurrently, the average Bitcoin transaction fee is $1.6, no matter the amount transacted. However, it\u2019s not always like that: it may vary according to the state of the chain. In April 21, 2021, for example, the fee was up to $62.7 per transaction<\/strong> [BitInfoCharts<\/a>]. That\u2019s something crazy if you want to pay<\/a> for a three-dollar coffee with BTC or donate<\/a> a small tip to your favorite online creator.<\/p>\n\n\n\n![\"Lightning-Network-bitcoin-fees\"](\"https:\/\/alfacash.blog\/wp-content\/uploads\/2022\/04\/Network-fees-traditional-transaction-vs.-Lightning.jpg\")
Network fees: traditional transaction vs. Lightning<\/figcaption><\/figure><\/div>\n\n\n\nThe waiting time for every transaction is also an issue, sometimes. To send coins across different wallets, it\u2019s necessary to wait between 30 minutes to 60 minutes per transaction. That\u2019s the time it takes for several miners<\/a> to create and validate a new block on the blockchain \u2014the system that supports cryptocurrencies.<\/p>\n\n\n\nTo consider a BTC transaction fully valid and irreversible, we need to wait for, at least, three confirmations by miners.<\/strong> This happens in the time we mentioned above. Litecoin<\/a> (LTC) is a little bit quicker, but it also needs some time. And also takes some fees.<\/p>\n\n\n\nThat\u2019s why Joseph Poon and Thaddeus Dryja navrhnut\u00e9<\/a> the Lightning Network in 2016. By using this system, the parties can avoid high fees and waiting times; and just transact instantly between them in private.<\/p>\n\n\n\nHow does the Lightning Network work?<\/strong><\/h2>\n\n\n\nWe\u2019ll try to not make it complicated, because, in the practice, it\u2019s not. But, behind the curtains of a nice app on your phone, the instant payment can be completed thanks to a couple of things: a multi-signature address and a Hash Timelock Contract (HTLC)<\/strong>. To put it clearly, the channels we mentioned before use, indeed, multi-signature addresses. This implies that the parties involved will have the same power over the funds, and they\u2019ll need to sign every transaction \u2014which is great to avoid misbehaviors. <\/p>\n\n\n\nFor its part, the HTLC assures that every party has a key to sign the funds, and also locks the funds while the channel is open. So, if one party wants to close the channel (sending it to the main chain) with a favorable (but fake<\/a>) balance on their side, then they\u2019ll have to wait until this special contract let it do so \u2014within 72 hours, for example.<\/p>\n\n\n\n![\"rusk\u00ed](\"https:\/\/alfacash.blog\/wp-content\/uploads\/2021\/01\/fraud-3229757_1280-1024x691.jpg\")
<\/figure><\/div>\n\n\n\nDuring this locked time, the other party can seize all the funds<\/strong> if the final balances of the channel are wrong. And they have the right to keep all the coins for them since the other party cheated. That\u2019s the punishment for the bad actor.<\/p>\n\n\n\nAn LN channel can be used by several parties as well. This way, for example, if Alice has a shared channel with Bob, and Diane has a shared channel with Alice but not with Bob; Diane can still send funds to Bob by using the route provided by Alice. That\u2019s why it\u2019s a \u201cnetwork\u201d. Usually, the users might only share an \u201cLN route\u201d provided by a wallet<\/a>, and that\u2019s it.<\/p>\n\n\n\nHow to use the Lightning Network?<\/strong><\/h2>\n\n\n\nThe first thing you\u2019ll need is to install a wallet or an LN node. Of course, the wallet option is far easier than the node, which comes with detailed instructions on GitHub (a platform for developers). Lightning<\/a> by Blockstream, Lightning Network Daemon<\/a> by Lightning Labs, and Eclair<\/a> by ACINQ are popular node implementations. We can\u2019t recommend these options if you have little informatics knowledge.<\/p>\n\n\n\nOn the other hand, we also have friendly wallets, ready to download and use<\/strong>. Available for desktop and mobile, we have options like Zap, Blue Wallet, Muun, Wallet of Satoshi, Electrum, or Breez. All of them have their own features and fees<\/a>, with some of them charging between 0.4% to 1% on channel creations.<\/p>\n\n\n\n![\"Bitcoin-wallet-phone-coins\"](\"https:\/\/alfacash.blog\/wp-content\/uploads\/2022\/04\/iphine-8-2968158_1920-1024x768.jpg\")
<\/figure><\/div>\n\n\n\nAnother factor to consider is the decentraliz\u00e1cia<\/a> of your funds. Some of these wallets (Blue Wallet and Wallet of Satoshi) are custodial, which means they guard your funds for you, and you don\u2019t have complete control of them. The others are non-custodial wallets: you\u2019ll always keep your s\u00fakromn\u00e9 k\u013e\u00fa\u010de<\/a>, therefore, full control of your funds. At least, almost<\/em> all the time.<\/p>\n\n\n\nCertain features on these wallets may need you to trust the funds temporarily<\/strong> to the company behind the software. For example, Muun has the \u201cTurbo Channels\u201d available. They\u2019re instant LN channels provided by Muun to offer liquidity and usability. As they describe<\/a>:<\/p>\n\n\n\n\u201cWhen transactions require the use of turbo channels, there is a limited window of time where you trust Muun. Specifically, during that window of time, you trust Muun will not execute a – very public! – double-spend attack. If you are not okay with this, you should disable turbo channels. You do need to know, however, that turbo channels allow all payments to settle instantly and make your money available to spend immediately.\u201d<\/p><\/blockquote>\n\n\n\n
Making an LN transaction<\/strong><\/h3>\n\n\n\nTo make the process more illustrative, we can make an LN transaction on the Muun wallet. The first step is, of course, to download the app from the App Store or Google Play. Then it comes the usual for every wallet: set up a PIN and back up your funds on \u201cSecurity\u201d. Once finished, it\u2019s time to deposit some satoshis.<\/p>\n\n\n\n
Tap on \u201cReceive\u201d, and you\u2019ll have two options: send coins from an on-chain (traditional) Pe\u0148a\u017eenka Bitcoin<\/a> or exchange, or send the coins via Lightning Network \u2014if you already have another LN wallet or if a friend with an LN wallet wants to send you funds. The second option isn\u2019t that hard. You\u2019ll only need to scan a QR code or copy (and share) the Lightning Invoice address.<\/strong><\/p>\n\n\n\n![\"Lightning-Network-Muun-Wallet\"](\"https:\/\/alfacash.blog\/wp-content\/uploads\/2022\/04\/Muun-wallet-interface.-Screenshots.-1024x603.jpg\")
Muun wallet interface. Screenshots.<\/figcaption><\/figure><\/div>\n\n\n\nThere\u2019s a menu to set the amount and valid time of your invoice (LN channel). The other party (or yourself) must do the opposite from their wallet: tap on \u201cSend\u201d and paste (or scan) the address or LN Invoice provided by the first wallet. Next, set the amount or choose \u201cUse all funds\u201d, add a note, and confirm the transaction.<\/p>\n\n\n\n
Finally, voil\u00e1! Instant micropayment, almost for free. In this case, the Turbo Channel enabled by Muun will last almost 24h, which means that the transaction will be engraved on the blockchain later. But you still can send your new coins as you please. Enjoy Lightning Network!<\/p>\n\n\n\n
\n\n\n\nWanna trade BTC, <\/em>LTC,<\/em> a in\u00e9 \u017eet\u00f3ny? Ty to dok\u00e1\u017ee\u0161<\/em> bezpe\u010dne <\/em>na Alfacash<\/em><\/a>! O tomto a mnoh\u00fdch \u010fal\u0161\u00edch veciach hovor\u00edme na na\u0161ich soci\u00e1lnych m\u00e9di\u00e1ch.<\/em><\/p>\n\n\n\nTwitter<\/a> * Telegram<\/a> * Facebook<\/a> * Instagram<\/a> * YouTube<\/a> * Vkontakte<\/a><\/p>","protected":false},"excerpt":{"rendered":"Did you know that you can make instant Bitcoin payments, almost for free? Lightning Network is here to do this. Let\u2019s discover it!<\/p>","protected":false},"author":5,"featured_media":9596,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_sitemap_exclude":false,"_sitemap_priority":"","_sitemap_frequency":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[48],"tags":[43,206,142,223,60],"class_list":{"0":"post-9583","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-learn","8":"tag-bitcoin","9":"tag-lightning-network","10":"tag-payments","11":"tag-spend-bitcoin","12":"tag-wallets"},"featured_image_src":"https:\/\/alfacash.blog\/wp-content\/uploads\/2022\/04\/Lightning-blog.jpg","author_info":{"display_name":"Isabel P\u00e9rez","author_link":"https:\/\/alfacash.blog\/sk\/author\/isabel\/"},"yoast_head":"\n
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The waiting time for every transaction is also an issue, sometimes. To send coins across different wallets, it\u2019s necessary to wait between 30 minutes to 60 minutes per transaction. That\u2019s the time it takes for several miners<\/a> to create and validate a new block on the blockchain \u2014the system that supports cryptocurrencies.<\/p>\n\n\n\n To consider a BTC transaction fully valid and irreversible, we need to wait for, at least, three confirmations by miners.<\/strong> This happens in the time we mentioned above. Litecoin<\/a> (LTC) is a little bit quicker, but it also needs some time. And also takes some fees.<\/p>\n\n\n\n That\u2019s why Joseph Poon and Thaddeus Dryja navrhnut\u00e9<\/a> the Lightning Network in 2016. By using this system, the parties can avoid high fees and waiting times; and just transact instantly between them in private.<\/p>\n\n\n\n We\u2019ll try to not make it complicated, because, in the practice, it\u2019s not. But, behind the curtains of a nice app on your phone, the instant payment can be completed thanks to a couple of things: a multi-signature address and a Hash Timelock Contract (HTLC)<\/strong>. To put it clearly, the channels we mentioned before use, indeed, multi-signature addresses. This implies that the parties involved will have the same power over the funds, and they\u2019ll need to sign every transaction \u2014which is great to avoid misbehaviors. <\/p>\n\n\n\n For its part, the HTLC assures that every party has a key to sign the funds, and also locks the funds while the channel is open. So, if one party wants to close the channel (sending it to the main chain) with a favorable (but fake<\/a>) balance on their side, then they\u2019ll have to wait until this special contract let it do so \u2014within 72 hours, for example.<\/p>\n\n\n\n During this locked time, the other party can seize all the funds<\/strong> if the final balances of the channel are wrong. And they have the right to keep all the coins for them since the other party cheated. That\u2019s the punishment for the bad actor.<\/p>\n\n\n\n An LN channel can be used by several parties as well. This way, for example, if Alice has a shared channel with Bob, and Diane has a shared channel with Alice but not with Bob; Diane can still send funds to Bob by using the route provided by Alice. That\u2019s why it\u2019s a \u201cnetwork\u201d. Usually, the users might only share an \u201cLN route\u201d provided by a wallet<\/a>, and that\u2019s it.<\/p>\n\n\n\n The first thing you\u2019ll need is to install a wallet or an LN node. Of course, the wallet option is far easier than the node, which comes with detailed instructions on GitHub (a platform for developers). Lightning<\/a> by Blockstream, Lightning Network Daemon<\/a> by Lightning Labs, and Eclair<\/a> by ACINQ are popular node implementations. We can\u2019t recommend these options if you have little informatics knowledge.<\/p>\n\n\n\n On the other hand, we also have friendly wallets, ready to download and use<\/strong>. Available for desktop and mobile, we have options like Zap, Blue Wallet, Muun, Wallet of Satoshi, Electrum, or Breez. All of them have their own features and fees<\/a>, with some of them charging between 0.4% to 1% on channel creations.<\/p>\n\n\n\n Another factor to consider is the decentraliz\u00e1cia<\/a> of your funds. Some of these wallets (Blue Wallet and Wallet of Satoshi) are custodial, which means they guard your funds for you, and you don\u2019t have complete control of them. The others are non-custodial wallets: you\u2019ll always keep your s\u00fakromn\u00e9 k\u013e\u00fa\u010de<\/a>, therefore, full control of your funds. At least, almost<\/em> all the time.<\/p>\n\n\n\n Certain features on these wallets may need you to trust the funds temporarily<\/strong> to the company behind the software. For example, Muun has the \u201cTurbo Channels\u201d available. They\u2019re instant LN channels provided by Muun to offer liquidity and usability. As they describe<\/a>:<\/p>\n\n\n\n \u201cWhen transactions require the use of turbo channels, there is a limited window of time where you trust Muun. Specifically, during that window of time, you trust Muun will not execute a – very public! – double-spend attack. If you are not okay with this, you should disable turbo channels. You do need to know, however, that turbo channels allow all payments to settle instantly and make your money available to spend immediately.\u201d<\/p><\/blockquote>\n\n\n\n To make the process more illustrative, we can make an LN transaction on the Muun wallet. The first step is, of course, to download the app from the App Store or Google Play. Then it comes the usual for every wallet: set up a PIN and back up your funds on \u201cSecurity\u201d. Once finished, it\u2019s time to deposit some satoshis.<\/p>\n\n\n\n Tap on \u201cReceive\u201d, and you\u2019ll have two options: send coins from an on-chain (traditional) Pe\u0148a\u017eenka Bitcoin<\/a> or exchange, or send the coins via Lightning Network \u2014if you already have another LN wallet or if a friend with an LN wallet wants to send you funds. The second option isn\u2019t that hard. You\u2019ll only need to scan a QR code or copy (and share) the Lightning Invoice address.<\/strong><\/p>\n\n\n\n There\u2019s a menu to set the amount and valid time of your invoice (LN channel). The other party (or yourself) must do the opposite from their wallet: tap on \u201cSend\u201d and paste (or scan) the address or LN Invoice provided by the first wallet. Next, set the amount or choose \u201cUse all funds\u201d, add a note, and confirm the transaction.<\/p>\n\n\n\n Finally, voil\u00e1! Instant micropayment, almost for free. In this case, the Turbo Channel enabled by Muun will last almost 24h, which means that the transaction will be engraved on the blockchain later. But you still can send your new coins as you please. Enjoy Lightning Network!<\/p>\n\n\n\n Wanna trade BTC, <\/em>LTC,<\/em> a in\u00e9 \u017eet\u00f3ny? Ty to dok\u00e1\u017ee\u0161<\/em> bezpe\u010dne <\/em>na Alfacash<\/em><\/a>! O tomto a mnoh\u00fdch \u010fal\u0161\u00edch veciach hovor\u00edme na na\u0161ich soci\u00e1lnych m\u00e9di\u00e1ch.<\/em><\/p>\n\n\n\n Twitter<\/a> * Telegram<\/a> * Facebook<\/a> * Instagram<\/a> * YouTube<\/a> * Vkontakte<\/a><\/p>","protected":false},"excerpt":{"rendered":" Did you know that you can make instant Bitcoin payments, almost for free? Lightning Network is here to do this. Let\u2019s discover it!<\/p>","protected":false},"author":5,"featured_media":9596,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_sitemap_exclude":false,"_sitemap_priority":"","_sitemap_frequency":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[48],"tags":[43,206,142,223,60],"class_list":{"0":"post-9583","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-learn","8":"tag-bitcoin","9":"tag-lightning-network","10":"tag-payments","11":"tag-spend-bitcoin","12":"tag-wallets"},"featured_image_src":"https:\/\/alfacash.blog\/wp-content\/uploads\/2022\/04\/Lightning-blog.jpg","author_info":{"display_name":"Isabel P\u00e9rez","author_link":"https:\/\/alfacash.blog\/sk\/author\/isabel\/"},"yoast_head":"\nHow does the Lightning Network work?<\/strong><\/h2>\n\n\n\n
<\/figure><\/div>\n\n\n\nHow to use the Lightning Network?<\/strong><\/h2>\n\n\n\n
<\/figure><\/div>\n\n\n\nMaking an LN transaction<\/strong><\/h3>\n\n\n\n
\n\n\n\n