The Massachusetts Institute of Technology (MIT) has been conducting a series of experiments with the bitcoin lightning network (LN). Their scientists concluded that the network can significantly improve cryptocurrency transactions. The lightning network allows users to bypass the blockchain when carrying out cryptocurrency operations. To conduct a transfer, users open a bilateral payment channel with a common account and funds deposited on the account enter for common use.
In this case, transactions do not require blockchain technology as users just exchange shares in a common account. The Lightning Network’s creators believe that it is possible to build a long network of links where any user can move the currency through a "live chain".
Blockchain is a closed transaction system. If the terms of the smart contract change in the real economy, it makes changes to blockchain transactions extremely difficult. To be able to solve this problem, the researchers introduced so-called “oracles” - trusted entities meant to broadcast data to smart contracts and are designed to make changes in blockchain operations if necessary.
However, blockchain integration into the real economy will require a constant supply of large data amounts, and, according to MIT’s researchers, a lot of oracles will be required for the Lightning Network to function correctly.
The authors of the study, Tadge Dryja and Alin S. Dragos, believe that the lightning network will help solve bitcoin’s scalability problem. At the same time, developers underline that the network is not yet ready for major transactions as the program code still needs further development with many experiments still to come.
By Nadya Astam