Ever since The Lightning Network was developed, it has been proclaimed as the solution for the scalability issues that are plaguing various cryptocurrencies, including Bitcoin. Soon after the reveal of the beta for the Lightning Network on the 15th of March, Stellar announced that they will be utilizing and integrating the Lightning Network into their platform.
For those unfamiliar, Stellar is a platform that looks to become the future of banking. They allow for quick, simple and reliable money movement with very low costs. This announcement makes Stellar among the first platforms to formally announce intent to integrate Lightning Network into their operations. In their latest blog post, Stellar explained the full benefits of Lightning and why they feel it’s the best scaling solution for the cryptocurrency.
The protocol has always interested us. As we said in our 2018 Roadmap it’s now clear that Lightning is the right way forward for Stellar.
Stellar plans to launch their beta on October 1st, 2018, with a full live net release planned for December.
In an interview with Bitcoin Magazine, Stellar Cofounder, Jed McCaleb believes there are three main benefits for Stellar integrating the Lightning Network. The first is obviously the benefit to scalability. While Stellar can already scale to a certain extent, the Lightning Network can take it to a whole other level. McCaleb also believes that Lightning (or a technology like it) is necessary for a protocol to truly reach their vision.
Another benefit is the increase in privacy as Lightning allows for the transactions to be kept off of the public ledger. The last of these three main benefits is interoperability, which will help with the exchange and use of information.
How does Lightning Work?
Lightning serves as a scaling solution for payment networks and was originally created to help the Bitcoin network scale but has the potential to support cross-protocol payments.
Lightning is constructed from payment channels, which allow a user to open a channel off-chain make their transactions there, instead of on the public ledger. Because they are off-chain, they are much quicker and cheaper.
While Lightning seems like the perfect solution for Stellar, integrating it will not be an easy task as developers are not able to port over Bitcoin code and developers will have to develop their own unique version.
With the hype surrounding Lightning and scaling being of paramount importance, don’t be surprised if over the next few months many other cryptocurrencies follow in Stellar’s footsteps and announce plans to integrate Lightning.