Bitcoin’s Lightning Network: Cool Things You Can Do With It Today
In this article, we take a look at some of the exploratory scenarios for which BTC’s Lightning Network is currently be used, each of which demonstrates how the power of Lightning can have a transformative effect on the Bitcoin Network and has the ability to change how we understand payment processing in the age of the blockchain.
Cool Things You Can Do Today With Bitcoin’s Lightning Network
The Bitcoin Lightning Network (LN), under development for 2 years and now slowly being rolled out for mainstream use, is hailed as the elegant solution to bitcoin’s speed and scaling woes, allowing bitcoiners to transact with one another without having to communicate with the blockchain. By moving transactions off-chain and only communicating with the blockchain when funds are moved in and out of the network, the LN can save BTC users an immense amount of time and money, allowing bitcoin to achieve its goal of become a universal payment system.
Strides in development and adoption of LN have been tremendous over the last 12 months, with the LN now consisting of over 7,200 nodes, 38,000 channels, and a capacity of $3 million in BTC transactions. There are over a dozen Lightning-compatible wallets, 7 payment processor companies, and 10 Lightning DApp providers. Of course, this is still only a small fraction of the overall Bitcoin Network ecosystem, but as the process of setting up a LN node and payment channels becomes simpler and more cost effective, its level of usage is likely to continue to snowball into the foreseeable future.
One of the more recent celebrity proponents of LN is Jack Dorsey, CEO of Twitter, who recently gave it his approval by announcing Twitter’s integration of a Lightning-based tipping service, tippin.me. Shortly thereafter, the amount of LN users saw a relatively big uptick, helping it to surpass the 30,000 channel mark. In February, Dorsey stated that it was not a matter of “if,” but “when” regarding his plans to implement Lightning to his own payment network, Square.
— jack (@jack) March 3, 2019
Short of the exposure of a serious flaw, such as a BTC-draining bug or exploit, there doesn’t seem to be much capable of holding LN back from eventually reaching millions of users. One potential problem known to exist is when one maliciously acting node rebroadcasts older transactions or channel states when another node at the opposite end of a payment channel is offline, allowing them to accrue more BTC than they should. However, this does not seem to be commonly practiced, as such bad actor nodes are quickly identified by the network and cut out shortly afterward. The implementation of watchtowers, third party services that continuously monitor the blockchain in an effort determine which nodes may be attempting to cheat others, is set to take place later this year, which will greatly reduce the chances for node fraud within LN.
Other limitations of LN include a maximum channel capacity of 0.168 BTC (roughly $600), the fact that BTC must be deposited and locked up in a channel before a user may join, and also that it is still in beta testing, as not all the kinks have been ironed out. While the technical proficiency required to begin one’s own channel may have been reduced over the last few months, it still requires something of a steep learning curve in order to successfully set up a node, which puts it out of the reach of the general public. Regardless, the process is becoming simpler by the day, with apps like TravelByBit’s Wallet of Satoshi performing most of the setup for its users.
— vires_in_numeris (@VNumeris) March 6, 2019
Before long, getting connected to Lightning will be just as easy as setting up an ordinary custodial BTC wallet online, except their transactions will be much faster, and cheaper as well. To get an idea of how cheap LN is compared to on-chain transactions, the median LN transaction base fee is currently is currently 1 satoshi, which makes it roughly 6,700x cheaper than on-chain transaction fees. To get an idea of how fast it is, a recent comparative study concluded that a transaction performed by Wallet of Satoshi was actually confirmed faster than a Visa transaction, and only slightly slower than an ApplePay transaction.
What are some of the things you can currently do with the Lightning Network, right now? The list is long and may surprise you. Like the nature of cryptocurrency itself, some of the ideas which developers have conceived in order to help demonstrate the power and value of LN are pretty creative, and we explore a few of them below. Using LN, you can currently:
- Order pizza. A crypto payments startup company named Fold recently launched a web-based service that allows U.S.-based users to pay for Domino’s pizza using Lightning. Users simply use the website’s store locator service to find the branch nearest them, specify whether the order is for carry-out or delivery, choose the products they wish to purchase, and confirm their order. They are then presented with a total in terms of both dollars and satoshis and given a Lightning invoice code that can be scanned by mobile device or copy/pasted into a desktop client. Within a couple of seconds, the payment is confirmed, and Domino’s begins making your pizzas.For those concerned with privacy, Fold states in their disclaimer that they delete user data after the order has been processed and recommends the carry-out option for those who do not want to disclose their address to Domino’s. The Fold app currently supports in-store crypto orders for Starbucks and Dunkin’ Donuts as well, with plans to add Panera Bread and Chipotle in the near future.
- Broadcast messages into outer space. As strange as it sounds, this is also actually a real thing, made possible via the Blockstream Satellite, a project which broadcasts incoming bitcoin blocks around the globe (and incidentally, into outer space). As described on the Blockstream web page for the project, “the Blockstream Satellite network broadcasts the Bitcoin blockchain around the world 24/7 for free, protecting against network interruptions and providing anyone in the world with the opportunity to use Bitcoin.” Last December, Blockstream released an update to its software, including an application programming interface (API) which anyone with a satellite dish can use to send messages to the Blockstream satellite. One company in particular, Spacebit, allows people to place real-time bids with Lightning to send messages into space via Blockstream’s broadcast.For now, the project is mainly just for fun, a combination of limit-pushing technologies that aim to have a transformative effect on the world as we know it. In the future, however, people may find themselves relying on satellite relay technology in order to download the blockchain or send messages to one another, in the case of the rise of overbearing governments which seek to censor internet transmissions or otherwise disrupt global communication as we currently know it.
- Play chess. A blockchain startup called Koala Studio has introduced a new way to play chess online dubbed Lightning Chess. In contrast to traditional online chess matches, some of the advanced features which players can engage include extending timers, un-doing moves, and wagering small amounts of BTC. Accounts can be created completely anonymously or with ID, and bitcoin deposited to one’s account can be withdrawn from the platform at any time. Of course, a user will have to have a LN node to which the funds can be withdrawn.In order to participate, an account is created, to which a corresponding Account Key is generated. This acts as a sort of user ID / password combination so that players can log in from different devices. Then, satoshis need to be deposited to one’s account so they may be used to activate the above-mentioned features within the game. After clicking “New Game,” the user will be presented with a link they can use to invite players to a game, and the game begins. More information on how Lightning Chess works can be found in a Medium article published by the company which thoroughly explains the concept, as well as hinting at their plans to add other games in the near future.
- Feed chickens. In a rather esoteric way to demonstrate the speed of the Lightning Network, users can create a LN invoice that, upon receipt of payment, will automatically dispense food from a container into a pen of chickens. Though not much is known about its creators or origins, the website Pollo Feed shows a live camera feed of a chicken coup where chickens can be seen actively hopping around, pecking at bits of food on the ground.Pollo Feed’s developers assure users that each successful payment (currently at a price of 3,000 satoshis, or $0.116) will result in “video evidence” of its receipt. There doesn’t seem to be any way to know how often the chickens are being fed, or where the coup is located, but Twitter users which have engaged the service seem to be happy with its outcome.
Happiness is feeding chickens in a different timezone using the Bitcoin Lightning network (pollofeed dot com) pic.twitter.com/YEe74Og7uC
— Alistair Milne (@alistairmilne) February 21, 2019
For more information on the Lightning Network, you can check out our previous publications on how it works and where its headed:
If you have any questions about LN, please feel free to ask them using the comment box below!