What is your involvement in the Lightning network?

My role involves running a large lightning node with substantial capacity, hosted on hashposition.com, which anyone can connect to in order to support the network with transaction processing. I’ve also contributed to debugging and testing various implementations.

How does Hash Position differ from other lightning nodes?

We have developed our own “manager” software that automatically adjusts fees, creates optimal channels, and rebalances them to ensure constant payment routing availability.

How quickly did the Lightning network get off the ground after the initial plan was released?

The Lightning network spent quite a bit of time on a test network, and it wasn’t recommended for use on the mainnet (real Bitcoin) until later, due to the possibility of minor issues. However, some early adopters bypassed this and started using the Lightning mainnet in 2017, if I recall correctly.

Even when it was officially launched for the mainnet, there was a restriction on channel sizes, capping them at 0.17 BTC. This limit wasn’t lifted until a few years ago. Recently, multi-path payments have been introduced, allowing payments to be routed via multiple paths at once, improving the likelihood of successful transactions.

As a layer 2 solution, the Lightning network continues to grow in terms of node participation, capacity, traffic, and new features. While the growth is fast, long-term users like myself feel that the pace could be quicker. On a positive note, El Salvador recently implemented Bitcoin transactions via the Lightning network, which is a significant milestone.

Can you explain to a beginner what a layer on top of a blockchain means in the case of Lightning?

How do you assist the end customer?

Robert from the Lightning network responds: In essence, the Lightning network reduces transaction costs and speeds up payments. It works like this: imagine paying at a bar with your credit card, and once everything is settled, the total amount is withdrawn. A channel is created between you and the bartender, and if your friend has also paid with a credit card, you can settle a debt with them via the bartender. Alternatively, you could create a separate channel with your friend and handle the payment there.

When a network is built, and if channels remain open, there’s no need for transactions to be recorded on the blockchain. Instead, balances move back and forth. When a channel is closed, only the final balances are recorded, minimizing blockchain space usage. Additionally, the transactions are encrypted, which enhances privacy, ensuring that not even the nodes involved in routing the payment can know the sender or recipient details.

Was the Bitcoin blockchain not sufficient, or why was the Lightning network necessary?

The Bitcoin blockchain is sufficient and remains essential for anchoring Lightning transactions. The issue with small transactions is that they don’t belong directly on the main blockchain. A layer 2 solution was always needed, but it took some time to determine the best approach.

Can you compare the Lightning network with MATIC or Immutable X on Ethereum?

What is the major difference, then?

While the systems might seem similar, I don’t have enough insight into MATIC and Immutable X to offer a detailed comparison. Lightning is specifically designed for Bitcoin and isn’t tied to a separate token or sidechain. However, there are some intriguing experiments underway to send stablecoins over Bitcoin using the Lightning network.

Is there an update to the original Lightning network white paper?

CryptoChipy asks: Considering that the original Lightning paper might need updating, do you know of any changes, Robert?

Robert replies: The BOLT specification, which is still under development, is the current standard. Since layer 2 operates without altering the underlying blockchain, it allows for faster and more flexible development. The two authors of the original white paper laid the foundation for what Lightning is today, but as far as I know, they are no longer actively involved in the network. Lightning, like Bitcoin, remains an open, decentralized standard.

Lightning is a technical enhancement built on top of the Bitcoin blockchain, not a new token or separate blockchain that needs explaining or marketing to the public.

Has much changed since the initial concept of the Lightning network?

Has anything influenced the direction or concepts behind the Lightning Network?

Yes, developments like multi-path routing (sending payments via different routes to improve the likelihood of large payments completing) and watchtowers (monitoring channels to prevent malicious activities if your node is offline) are among the advancements. We’re also waiting for improvements to the blockchain to make anchoring channels smoother, safer, and cheaper. Additionally, there’s growing interest in sending non-Bitcoin assets, like stablecoins, over the Lightning network. However, the core idea behind Lightning remains the same.

Are you investing in crypto yourself?

CryptoChipy asks: Are you focused on major cryptocurrencies or smaller, fast-growing ones?

“I’m a Bitcoin maximalist,” says Robert. For those unfamiliar with this term, CryptoChipy explains that Bitcoin maximalists believe Bitcoin is the only cryptocurrency that provides everything users need. They feel that no other crypto holds value compared to Bitcoin.

Robert continues: While there are other cryptocurrencies that one can profit from, I personally avoid them. I’m curious about how Ethereum’s move to proof of stake will impact the ecosystem, but I don’t have any predictions.

What would your ideal blockchain look like?

A fixed structure that is easy to maintain and free of bugs, but also flexible. Short answer: Bitcoin.

Do you foresee any serious challengers to Bitcoin and Ethereum in the coming years?

Not in a direct way. I believe in a central blockchain, with sidechains and layer 2 solutions built on Bitcoin. Bitcoin might not be great for smart contracts, but it doesn’t need to be. Bitcoin can serve as a stable foundation for everything else.

Do you know which crypto wallets are well-integrated with the Lightning network?

Development speeds vary across different platforms. Large exchanges and wallets like Kucoin and Gate.io still don’t support segwit or taproot. You can find a comprehensive list of supported exchanges and useful links for the Lightning network online.

Why should an average crypto user care about Lightning?

CryptoChipy continues: Är det värt att använda?

Robert replies: Definitely. Next time you switch or transfer to another crypto wallet, choose one that supports Lightning. You can usually also send transactions on-chain if needed.

CryptoChipy concludes: Many thanks to Robert for taking part in this interview. We believe that many of our readers will find the Lightning network’s benefits intriguing once they discover how it works.

Fotnot: Several companies are developing Lightning network products and protocols to facilitate faster, cheaper Bitcoin transfers. These include Lightning Labs, ACINQ, and Blockstream.