Testing Carries On
As was announced at the beginning of July 2018, testing had began in earnest on the Lightning Network – a core component of enabling Bitcoin transactions to not only become faster but also cheaper. The announcement also highlighted the fact that Bitcoin could become a lot more scaleable, a worry for many previously.
Last month that testing began with 100 merchants who were in charge of seeing how well the system worked and whether it was ready for the market place. Phase 2 has now started after just over a month of Phase 1 being in full swing. This second stage now offers the opportunity for the general public to make a little extra money through the use of lightning nodes. Although you will absolutely not make a small fortune being involved in the testing of the Lightning Network – you are looking at taking in approximately $2 a month – it is a great opportunity to see how far Bitcoin has come and be involved in its future. The company behind it all – CoinGate – is keen to continue testing the scaleability of the Lightning Network and make sure that its transactions continue to be immediate, ready for the mainstream release which is not too far away.
Nodes, Nodes, Nodes
However, for now, testing is not for the faint hearted or technically inept. Not only do you need to be technically savvy but you also must be able to store a lot of data (i.e. 200 GB) to take part in this more open Phase 2 process. As you may or may not be aware, every time a transaction is made on the Lightning Network it will pass through many nodes before arriving with the recipient of the payment. Each node will have an operator who has the choice on whether to charge a fee to allow said payment to pass through. There are over 3,000 nodes on the system all of which will have had their fees reviewed and updated by their operator. The fee is automatically set to zero but the user can dictate what they would like it to be. As it stands right now, surprisingly, many of those using the Lightning Network are not changing the default fee from zero. Insiders believe that these users are the true ambassadors wanting to see Bitcoin improve just for the pure and simple development of said Cryptocurrency.
The Transaction Fees
However, transaction fees are important for the Lightning Network. The more money that is tied to a particular channel, the larger the amount of money that can pass through said channel whether this is in amount in total or the number of transactions. So there is a lot riding on the transaction fees no matter how minimal they are. Fees are also a great marketing tool for these channels too. There have even been provisions made for users wanting to actually pay customers to use their channel rather than the other way around. This is a great opportunity for raising additional funds for a channel should the need be there.
The Lightning Network certainly shows what the future can hold with Bitcoin. And what happens now could be a signpost for how things will unfold in the future. Many do believe that the transaction fees will always be kept to a minimum and will be used as more of a bartering tool. This in turn will lead to much cheaper transactions across the board and a lot more cost effective than the online payments in existence now.