What is the Bitcoin "Lightning Network?"

It has been a big week for Bitcoin. On Tuesday, the leading cryptocurrency achieved an important milestone, when developers and miners secured a "lock-in" on the decision to implement SegWit, a protocol which will allow the Bitcoin network to expand in order to accommodate surging customer and transaction interest. Now, the talk has already begun to shift toward a mysterious "Lightning Network," which some developers have suggested could be a revolutionary change for the network. What is the Lightning Network, and when can Bitcoin users and investors expect the changes to take place?

A "Game-Changing Innovation"

According to a report by CNBC, the Lightning Network would potentially allow for transactions and microtransactions utilizing Bitcoin to take place instantaneously. Aurélien Menant, the founder and CEO of cryptocurrency exchange Gatecoin, described the network as "a game-changing innovation," saying that it "utilizes smart contract technologies to enable instant micropayments using cryptocurrencies such as Bitcoin."
Analysts view the lock-in of the SegWit protocol as an essential step toward the implementation of the Lightning Network, which would constitute a sort of added layer of framework which could be grafted on to the existing Bitcoin network. Fran Strajnar, co-founder and CEO of Brave New Coin, explained that "Bitcoin's SegWit means the many well-financed companies researching Lightning solutions can start to test on the main network," possibly allowing the implementation of the Network to take place in the near future.

Years of Anticipation

CNBC suggests that companies and developers alike have been waiting for the implementation of Lightning for more than two years. With the adoption of SegWit, it's possible that the Network could be realized in the coming months, with products potentially reaching the market "very soon."
The technology behind the Lightning Network will improve upon the process by which Bitcoin transactions are validated. Currently, the process makes use of mining rigs, requiring that computers solve complicated math problems before the transactions can be recorded on the blockchain ledger. Because of the computing power required, a single transaction can take up to an hour to confirm. With Lightning, however, this process would be significantly sped up. The Lightning Network would require that participants agree to transact on a separate, offline channel, and then the blockchain would update to reflect the external transaction. Thus, the middleman of the mining rig or digital wallet provider oculd be skipped entirely. The developers of the network have indicated that its speed would enable it to "be used at retail point-of-sale terminals, with user device-to-device transactions, or anywhere instant payments are needed." It is expected that Lightning would help Bitcoin to become competitive with other instant payment platforms and that it could revolutionize the way that peer-to-peer payments are transacted.

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