The "Lightning Network" is a proposed solution to the Bitcoin (and by default Litecoin) scalability problem where transactions are processed off-chain through "payment channels" that only need to hit the blockchain when they are open and closed.
I researched how it works and believe it will not help scale Bitcoin. Here's a couple videos on it:
The example often used is paying for coffee. You open a payment channel with the coffee shop, buy an X amount of coffee, and then close the payment channel at which point the coffee shop gets his coins. It essentially acts as a gift card. The problem is that you will need to hit the blockchain twice, and at current fees, that means a huge transaction cost just to buy coffee. The theory is that once everyone is connected to LN, the opening and closing of payment channels will be infrequent, but merchants still have to close those channels somewhat regularly to get paid.
I'm not convinced that this will relieve existing congestion on the network, because who currently does micro transactions on Bitcoin today? Lightning Network seems to be most useful in a commercial retail environment IF bitcoin gets used in that respect, which it's currently not.
Because there are no other scaling proposals for Bitcoin other than LN, which may not be even implemented for years, I don't think Bitcoin will solve its scaling problem.
As for Litecoin, it's fast now, but if it reaches the transaction usage of Bitcoin, which may take years, it will have the same congestion problems.
I researched how it works and believe it will not help scale Bitcoin. Here's a couple videos on it:
The example often used is paying for coffee. You open a payment channel with the coffee shop, buy an X amount of coffee, and then close the payment channel at which point the coffee shop gets his coins. It essentially acts as a gift card. The problem is that you will need to hit the blockchain twice, and at current fees, that means a huge transaction cost just to buy coffee. The theory is that once everyone is connected to LN, the opening and closing of payment channels will be infrequent, but merchants still have to close those channels somewhat regularly to get paid.
I'm not convinced that this will relieve existing congestion on the network, because who currently does micro transactions on Bitcoin today? Lightning Network seems to be most useful in a commercial retail environment IF bitcoin gets used in that respect, which it's currently not.
Because there are no other scaling proposals for Bitcoin other than LN, which may not be even implemented for years, I don't think Bitcoin will solve its scaling problem.
As for Litecoin, it's fast now, but if it reaches the transaction usage of Bitcoin, which may take years, it will have the same congestion problems.
Roosh
http://www.rooshv.com