Lightning Labs has launched a beta version of the first tested version of its software for Lightning Network, the technology which is expected to solve bitcoin’s scaling problems. The software is called LND and uses bitcoin and litecoin currently.
Lightning Network decreases transaction costs and increases their speeds by making it possible to open channels between two transacting parties. These channels, which conduct transactions off bitcoin’s blockchain, connect with each other to form a separate transaction layer on top of the main one. They update balances and are charged fees only after a channel is closed.
Elizabeth Stark, CEO of Lightning Labs, told Bloomberg that online businesses would especially benefit from the introduction of LND. This may be because opening a channel with an online business likely involves less friction (in terms of physical effort) as compared to offline businesses.
Recent developments within bitcoin’s network have facilitated the technology’s introduction. For example, bitcoin’s transaction fees have declined. The overall fee for Lightning Network transactions comprises two components: the fee between transacting parties (which is zero currently) and bitcoin’s transaction fees, which is only charged upon closing of a channel.
According to Stark, the number of Lightning Network transactions recently have amounted to low thousands per second. Per latest statistics, 1006 nodes on bitcoin’s network have deployed Lightning Network. They have processed transactions worth $37,819.71.
Lightning Labs has also raised $2.5 million from an array of notable investors including Twitter CEO Jack Dorsey and former Paypal COO David Sacks.