Portuguese software engineer João Almeida has created ‘Poketoshi,’ a platform that allows users to play Nintendo’s popular Pokémon game on the Lightning Network (LN), The Next Web reports today, June 19. Lightning Network is a second-layer solution to Bitcoin’s scalability limitations, opening payment channels between users that keep the majority of transactions off-chain, turning to the underlying blockchain only to record the net results. Almeida’s Poketoshi uses LN together with the live streaming video platform Twitch, which allows users to interact with the game via an online chat room - as in the existing ‘Twitch Plays Pokémon’ series. Poketoshi implements a Lightning Network-enabled virtual controller for users to enter their gaming commands, charging them 10 Satoshi per command, one Satoshi being equal to a one hundred millionth of a single bitcoin. Payments are made through OpenNode, a Lightning-enabled Bitcoin (BTC) payment processor. The game is therefore a playful way of testing the Lightning protocol’s ambition to facilitate off-chain instant BTC payments at high volume. As The Next Web notes, several Poketoshi users are already making wry allusions to the notorious rivalry between Bitcoin Cash (BCH) and LN advocates, with the former arguing that the BCH hard fork is a better answer to Bitcoin’s scalability issue than the LN second-layer solution. In Poketoshi users’ tweets, an in-game rival avatar named ‘BCash’ suffers a bitter fate on the new LN-enabled gaming platform: In February this year, Laszlo Hanyecz, the man who completed the world’s first documented BTC transaction for a physical item in 2010 by paying 10,000 BTC for two pizzas, repeated his historic purchase with Lightning Network - with the caveat that he had to get his friend in London to “subcontract” out the pizza delivery to a local pizza place in order to pay using LN, given that “pizza/bitcoin atomic swap software” was as yet unavailable. In March, LN made major steps towards mainstream adoption by seeing its first mainnet product implementation go live, following which several more user-oriented tools have come online from private developers. The first user mobile wallet built for Lightning Network launched April 4.<doc-sep>Lightning Network Development Continues Blockstream, a firm focused on the development of cryptocurrency infrastructure, recently announced the release of c-lightning 0.6, a protocol built on the Lightning Network. For the uninitiated, the Lightning Network is a Bitcoin scaling solution built upon the idea of near-instant transactions that cost under a cent. The early stages of the Lightning Network rolled out within the past year, have been met with mixed reviews, with some stating that it isn’t ready for widespread adoption. This new and improved protocol is a complete revamp of the previous version, allowing for the implementation of new features, that will hopefully allow for a better user experience. The new features included in c-lightning 0.6 are as follows: Lightweight Nodes This feature allows for a c-lightning Bitcoin node to be run on low-powered devices like the Raspberry Pi, allowing for higher node adoption. ‘Gossip’ Protocol This new protocol essentially allows low-powered and mobile devices operating on the Lightning Network to use less bandwidth while syncing up with the network, saving bandwidth through the omission of data that isn’t needed. API Stability The API stability seen in this new update will allow for projects to be built on top of c-lightning, as Blockstream will support the API for the “foreseeable future.” Wallet and sync C-lightning now has a wallet that supports on-chain and off-chain funds for the Lightning Network. This system will be fully secure, with users not being required to directly interact with the wallet to move funds to the internal wallet TOR support This feature is simple enough as c-lightning now accepts nodes run over the TOR network, increasing the privacy and anonymity of node operators. Payment Logic Some users of the Lightning Network find trouble making consistent transactions. However, c-Lightning 0.6 has improved its logic system, allowing for better transaction management through “automatic retires for routing failures, randomization of route selection and better feedback about the current state of a payment.” Lightning Network Grows At A Rapid Rate Many users criticized the Lightning Network for having a low Bitcoin capacity, with some users reporting that the network had a capacity of less than one Bitcoin. This was true, there were only 46 channels for the Lightning Network in January, bringing its capacity to around 0.682 Bitcoin. Since then, the Lightning Network has grown rapidly, and now has over 7,800 open channels with a staggering 26 Bitcoin channel throughput. The Blockstream Blog stated: That is a 16,856% increase in channels and a 4,084% increase in channel capacity in 6 months! Many users hope that this adoption can continue, as the Lightning Network cements itself as a viable way in which Bitcoin can scale to the masses. Bitcoin Fees Drop To Manageable Levels Although development continues on the popular scaling solution (Lightning Network), Bitcoin fees have dropped to sustainable levels, finding stability at around one U.S. dollar. Although seen as a positive development by some, others have begun to worry that this decrease in fees in due to lack of interest in the use of the Bitcoin blockchain. Some attributed the slowdown to decreasing prices (and hype), along with other users just ‘HODLing’ their cryptocurrencies. In addition, Segwit adoption has also become prevalent, with many cryptocurrency services offering support for Segwit as a way to decrease transaction fees. This $1 fee is a far cry from what was seen months ago, as Bitcoin fees temporarily reached over $50. At that time, users began to criticize BTC for having fees that resembled traditional financial institutions. Since then, Bitcoin fees have remained a popular topic in the industry, as altcoins like Ethereum and Litecoin offer fees that are often under 10 cents. It is clear that if Bitcoin fees will need to continue lower if it wants to hold its place as the figurehead of ‘digital cash’, through the use of scaling solutions like Segwit and the Lightning Network.<doc-sep>There is hardly any denying the immense possibilities attached to the Lightning Network (LN). However, despite its growth and increasing popularity, it still performs poorly as a Bitcoin payment processing protocol. Lightning Network Can’t Handle Large Transactions Yet Lightning Network is a second layer payment protocol on the Bitcoin blockchain. Together with Segregated Witness (SegWit), it is one of the essential upgrades to the Bitcoin architecture. Both have even been identified as primary reasons for the drop in BTC transaction fees. LN uses smart contracts deployed on top of the Bitcoin blockchain network to facilitate instantaneous low-cost transactions. The protocol also provides a measure of scalability with some experts identifying it as the possible panacea to Bitcoin’s scalability conundrum. Since its introduction, LN has grown to over 2,500 nodes with a network capacity of $150,000. Despite its growth, LN appears to be less than ideal for sending large BTC payments. According to a recent report by Diar, LN has a success rate of only one percent for transactions above $200. Even for transactions that are less than $100, the success rate is somewhere in the 70 percent region. For a protocol that is supposed to improve the payment efficiency and scalability of Bitcoin vastly, these figures are not up to standard. Major Bugs in the LN Protocol LN is still in its Beta testing phase, and as such, there are critical bugs in the system. One of these flaws is the fact that all three participants in a transaction – sender, intermediary, and receiver – have to be online for the transaction to occur. Presently, it is impossible to transfer BTC via LN to someone who is offline. This particular bug has led to another less than ideal situation in the LN protocol – the emergence of large hubs on the network. These large hubs have enough liquidity to route large BTC transfers. Thus, network capacity has become concentrated in a handful of these large hub nodes. In fact, ten of the largest LN nodes control 53 percent of its capacity despite being only a meager 0.4 percent of the network. Bitcoin Exchanges Implementing LN Hubs It is important to note that these large hubs don’t control the network. However, they can be considered as money transmitters. For this reason, regulated exchange platforms are reticent about implementing LN hubs. Commenting on this issue, Bitcoin advocate, Andreas Antonopoulos said: I don’t think Coinbase will run Lightning, and I think there are many reasons why we’re not going to see regulated exchanges run Lightning Hubs. They have a fully KYC/AML-ed customer on one end of their connection, but if they receive a payment that’s going to that customer over the Lightning Network, they have no idea whether that customer’s the final destination. If they receive one coming in from that customer, they have no idea if that customer’s the origin, which means their KYC just fell apart – completely fell apart. Do you think Lightning Network will be able to facilitate larger transactions in the future? When do you expect Bitcoin exchanges will begin to run Lightning Hubs? Keep the conversation going in the comment section below. Images courtesy of Diar.co and antonopoulos.com<doc-sep>
A study conducted by Diar has revealed that “the reliability of successfully routing a payment on the Lightning Network is still quite low.” Diar provides analysis of significant developments within the global digital currency industry. The Lightning Network (LN) is the second layer payment protocol designed to solve the problem of Bitcoin (BTC) scalability. The LN purportedly allows for almost instant, low-cost, and scalable transactions between two parties. Though the LN protocol was very well accepted by the crypto community after its release in January of this year, the study suggests that the protocol stumbles when processing large amounts. According to the study, the number of nodes and the fund capacity has been firmly increasing, but the reliability of successfully routing a payment in the LN stays quite low, especially in regards to larger amounts. On average, each node contains over four channels open and each channel has an average capacity of $20. The probability of a successful payment operation with no more than a few dollars is 70 percent, while the success rate for a payment of less than $200 is 1 percent. Another sticking point, which leads to the criticism of the LN, is that both parties, participating in a transaction have to be online at the time when the transaction occurs. It is more appropriate to create a channel with someone who is always online and has enough liquidity to route larger transactions, the study says. “The lack of liquidity between nodes, and the online factor, has led to the concentration of capacity to only a few large nodes. Ten of the largest LN nodes (0.4% of total nodes) currently have 53% of the network’s capacity while the remaining 2,500 nodes have 47%.” As per the study, to successfully route a transaction through a channel, it requires a higher amount loaded on a channel than that being transacted to the other party. “If the transaction cannot be routed to the required recipient, it fails and the funds are returned to the sender,” it says. Recently, the LN was utilized by a Portuguese software engineer who created “Poketoshi”, a platform that allows users to play Nintendo’s Pokemon game on the LN. Poketoshi implements a Lightning Network-enabled virtual controller for users to enter their gaming commands, charging them 10 Satoshi per command, one Satoshi being equal to a one hundred millionth of a single BTC. In April, the first user mobile wallet built for the LN was launched and became available for Android users from the Google Play Store. The technology lets users send Lightning payments, which should notionally cost a fraction of regular BTC network fees and confirm almost instantly.