The most relevant way to talk about Bitcoin’s Lightning Network for non-engineers/developers and crypto newcomers is to explain how it can benefit you and how you engage with it.
The Lightning Network uses smart contracts to oversee transactions that happen alongside — but not on — the main blockchain. Smart contracts remove any need for trust between parties on the Lightning Network because they are self-enforcing. Parties can then safely carry out multiple transactions with each other off the blockchain but only report the agreed upon final tally as a single transaction to the blockchain.
This thins transaction traffic on the blockchain and hastens approvals, reducing competition and driving down fees.
It’s more than useful. So do how you link to the Lightning Network and take advantage of its benefits?
If you understand the term six degrees of separation, you have the gist of the Lightning Network. It will use about three to eight payment channels per person to create a dense network of connected users.
A channel is just a digital path between two users. It’s like two neighbors built a road between their properties, and that road is attached to other roads going to other properties, and so on and so on. The two neighbors can use their road for their business, but others can use it to get where they want, moving through and going beyond those two properties. It’s the Lightning Network’s job to scout the most efficient collection of “roads” to get from sender to recipient.
“You don’t need a channel to your payee,” Andreas Antonopoulos explained on a recent episode of Let’s Talk Bitcoin. “You need a few connections to a few nodes. Then you can route to other nodes in the network.”
Consider if everyone had a three to eight Lightning Network channels going out into the world. Then a handful of hops — the degrees of separation — become a connection to anyone on earth on a Lightning Network channel.
Your channels, funded with a little cryptocurrency each — much like you keep cash in your wallet or checking account — allow you to transact with anyone anywhere, cheaply and instantly.
There are various sites providing step by step instructions for joining the Lightning Network. It’s not difficult. It is in its infancy, so it’s risky right now. Consider only doing small transactions while the network is working out some bugs.
The process of starting a node depends on whether you’re on a mac or a PC, but it’s relatively simple as well. There are many sites that offer instructions, but here are a few for a starting point.
People who run nodes stand to gain a bit of money, but don’t expect much. There’s a lot of competition, and that will only increase. More important than the little bit of coin you’ll earn, you’ll be able to move your own Bitcoin and other cryptocurrencies much more easily and for much lower fees. You’ll also be providing a valuable service to the crypto community and taking an active role in a revolution.
We urge you to take part at whatever your comfort level, whether that’s as a spectator, on your own Lightning Network channel or by starting your own node. You might even consider challenging yourself to go a bit beyond your comfort level. The democratizing potential of the crypto revolution is on par with what the Athenians did around the fifth century BC, and you might want to take a greater part in something that momentous.