Everyone craves instant gratification and has become accustomed to going to an ATM to get instant cash or simply opening an app and transferring money to personal accounts instantly. Gone are the days when you had to arrange your schedule around banker’s hours, balance your checkbook manually, keep track of your deposits on a ledger, and stand in line waiting to perform your simple banking transaction with a real, live teller. To go back to such a time would be frustrating, time-consuming, and generally considered unwieldy by today’s standard.
In the world of altcoins, people want instant gratification too. Currently, though, altcoin transactions have a bit of the same problem as the banks of long ago, which the Lightning Network is hoping to solve.
Currently, transactions are posted to the blockchain via miners. This can take an hour or more and it is fairly expensive; the miners want to get paid for their time and processor cycles, after all. Think of this like waiting in line for a teller with a slip of paper confirming a deposit or a withdrawal. The Lightning Network is like an ATM, where instead of miners processing the transaction, it is done between two people and then added to the blockchain. It is a payment protocol that enables instant transactions.
By speeding up bitcoin or altcoin transactions, the Lightning Network may be the thing that brings the world of altcoins into the light, enabling people to use bitcoin or altcoins as actual digital currency. For example, if you wanted to buy something with an altcoin, you would use the Lightning Network paired with online shopping systems to take care of the transaction instantly, just as you might use payment methods like debit or credit cards today. By providing instant transactions and convenience, the Lightning Network could help bitcoin and altcoins go mainstream.
However, the Lightning Network still needs to be implemented and tested, so before you invest, make sure you understand the technology being put in place and how it will affect use cases for altcoins. To learn more about the Lightning Network and other altcoin tools, subscribe to the Bitcoin Market Journal newsletter today!
