The lightning network has successfully processed a cross-blockchain atomic swap, marking another milestone for bitcoin scalability, privacy, and infrastructure.
Developers at Lightning Labs used successfully a lightning network channel to trade testnet bitcoin for testnet litecoin. The transaction was completed off-chain, e . g they were in a position to trade the coins without recording a transaction on either the bitcoin or litecoin blockchain and without the need for a trusted other such as a cryptocurrency exchange.
Here’s why that’s significant.
For years, the bitcoin community has wrestled when using the question of precisely how to scale the network to contain more users without having to sacrifice security or decentralization. Some developers — specifically those who believe bitcoin’s chief utility is based on its use to provide a currency — conisder that the network should scale through blocksize increases. Others support a broader approach that depends on so-called second-layer solutions — like the lightning network — that expand on top of the bitcoin network and protocol but operate off-chain, as we say.
This debate reached a head in 2019 when bitcoin’s meteoric price rise has a corresponding influence on transaction fees. Second-layer solutions remained in development and no set release date, together with the currency-first crowd largely cast their lot with bitcoin cash, a cryptocurrency which has been created by having a hard fork on the bitcoin blockchain and depends upon on-chain scaling to continue transaction fees low.
However, lightning advocates consistently believe that off-chain transactions — processed through second-layer payment channels at virtually no cost — is the future of everyday bitcoin payments and transfers. In addition to reducing transaction fees, they are willing to conceal payments within the blockchain — ensuring user privacy — without having to sacrifice the trustlessness of bitcoin’s blockchain. Is actually full-featured support for atomic swaps, users is likely to trade coins across blockchains, eliminating necessity for centralized order-book exchanges.
With the successful sandbox demonstration that off-chain atomic swaps are possible, that latter goal is the one step closer to becoming a reality if your lightning network is deployed over the main bitcoin blockchain.
For a far more detailed explanation associated with lightning-based atomic swaps function, want blog post provided by Lightning Labs.