Lightning Network Wallets — A New Era of Innovation
The Bitcoin network is designed to be decentralized and still have one of the most resilient computer systems in the world.
As we have reported in our previous articles, the disadvantage of the BTC architecture is limited scalability. And while payment giant Visa can process up to 65,000 transactions per second (TPS), the Bitcoin network can only handle about 7 TPS.
Because of the network’s low speed and ever-increasing demand for cryptocurrency, the BTC blockchain has been overloaded for some time. This has led to higher fees and increased transaction processing times for users.
Bitcoin developers are not going to sacrifice security and decentralization to improve blockchain scalability. Therefore, they are working on implementing Layer 2 (L2) solutions to increase the throughput of the core network.
The most popular L2 scalability solution for Bitcoin has been the Lightning Network (LN). It moves BTC transfers out of the core network to offer users nearly instant and very cheap payments.
A few years ago, the Lightning Network served solely as a “playground” for advanced users and developers. Since then, however, the second-tier payments ecosystem has rapidly expanded with numerous user-friendly apps and services. They allow anyone to participate and take advantage of the network without any serious technical knowledge or experience.
In this article, we’ll introduce you to the theoretical basics of Lightning. You will also learn about the product that OmniBOLT is developing, which will soon be available to a wide range of users.
What is a Lightning Network?
Before we go into the topic, let’s briefly remind our readers what a Lightning Network (LN) is.
With the potential to scale up to billions of transactions per second, the Lightning Network is a Layer 2 network. It is focused on micropayments and sits on top of the main Bitcoin blockchain.
Although the LN operates as a separate network with its own nodes and software, it interacts with the BTC blockchain. However, there is no need to record every Lightning transaction on the main network. To save blockchain space and take some of the load off the Bitcoin network, only those transactions in which a user deposits or withdraws BTC from the Lightning network are recorded in the distributed registry.
What are Lightning wallets and how do they work?
Lightning wallets are software solutions connected to the Lightning Network. They allow you to store, send and receive BTC over the LN.
Important to note: While the basics of Lightning Transactions are similar to those of the core network, there are some key differences between Bitcoin forwarding at Layer 1 and Layer 2.
Each Lightning Network channel locks in a limited amount of BTC (a mini pledge between the parties). Therefore, the Lightning Network is designed for sending and receiving transactions with small fees or micropayments. But for transactions with large amounts of coins, it is better to use the main Bitcoin network.
If you want to receive Bitcoins via LN from someone, you will need to create an invoice in Lightning in the form of an alphanumeric string or QR code. In order to make a payment to your wallet in Lightning, the sender must scan this invoice through his LN wallet. This way he will digitally sign and confirm the transaction.
This process is very similar to receiving funds through a standard Bitcoin address. The Lightning Network ecosystem has improved dramatically since its launch. Making BTC transactions with a Lightning wallet is now as easy as using a wallet on the main network.
Some services require users to create channels manually. More and more Lightning wallets are automating this process to provide more convenience to their customers.
What solution does OmniBOLT offer us?
OmniBOLT is a protocol built on the Bitcoin and OmniLayer networks that allows transactions with native OmniLayer crypto-assets using the Lightning network. The OmniBOLT channel allows instant transactions of crypto-assets issued on top of OmniLayer.
OmniBOLT is developing a truly revolutionary wallet that will allow users to make transfers on the Lightning network easily and simply. Moreover, it will be possible to transfer not only BTC but in the future 700+ more OmniLayer assets.
The wallet is expected to launch in November 2022, and below we’ll give you a little bit of information about what’s to come:
1) A high level of protection. It will be a self-sustaining wallet, and no third party will be able to access your node.
2) Ease of use. It will be easy to manage the LN node through the app because it works on your phone 24/7 with cryptographic encryption.
3) You will receive and pay via OmniBOLT “Spec 11” which is safe, cheap and quick.
4) Opportunity to earn. You can also make money by creating more channels to provide liquidity to the OmniBOLT lightning network.
All of this and many more amazing things are coming very soon. OmniBOLT takes a really big step in scalability and the ability for users to discover this amazing technology!
Conclusion
Bitcoin has valuable qualities that make it an attractive investment for many. At the same time, the Lightning Network also allows cryptocurrency to be used for everyday payments.
Receiving and sending inexpensive and instant BTC transactions through the LN network was a distant dream several years ago. The dream has become a reality as the Layer 2 scalable network ecosystem has grown and user-friendly Lightning wallets have and will continue to appear on the market.
The number of users is proliferating because the network, today, has undeniable advantages:
1) Small size of commissions for transactions, which is less than the implementation of standard payments and even transfers in fiat currency;
2) Increased speed of transactions, which is expected by many people;
3) Emphasis on so-called microtransactions.
According to forecasts, already in 2030 more than 700 million people will use LN.
About OmniBOLT
OmniBOLT(Basis of Lightning Technology) is the world’s first stablecoin (on Omnilayer) circulation specification for Lightning Network, and the second important protocol presented by Omni foundation. It is a big extension of BOLT, the major parts of this spec are p-2-p instant payment and mortgage loans for crypto-assets.
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