Lightning Network

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The Lightning Network is a Layer 2 payment protocol used by cryptocurrencies like Bitcoin and Litecoin. The Lightning Network enables fast transactions and solves the Bitcoin scalability problem. 


How does the Lightning Network work?

It works by using a bidirectional peer-to-peer system. This allows users to make micropayments with cryptocurrencies on separate blockchains. Users use the Lightning Network by opening a payment channel. This commits a funding transaction to the layer 1 blockchain. When both parties confirm the distribution of funds a node closes the payment channel by broadcasting the transaction information to the network.

If either party doesn’t confirm the transaction there will be a dispute period. In this period nodes contest the broadcast distribution. If any node succeeds in broadcasting a more up-to-date distribution, all funds will be transferred to this node. This prevents nodes from broadcasting out-of-date transactions and thereby defrauding the network. 

Business24-7 aims to help those interested in cryptocurrency make safe and informed investing decisions. We are dedicated to offering our readers unbiased reviews of leading cryptocurrency exchanges for traders at all levels. Cryptocurrency exchanges are included in our reviews if they are safe, liquid, regulated by proper authority, or decentralized. 

All trading involves risk. More than 80% of investors lose in spread bet and CFD trading. As these complex instruments allow for the use of leverage, there is a high risk of losing more money than you have deposited. Before attempting to participate in spread bets and CFDs, consider how well you understand them and if you can afford to lose your money.

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Stefan Grasic (Dipl.-Jur) is the World Wide Director of research for Buisness24-7 and has considerable experience in the financial and investment niche, but also enjoys writing articles for the general readership. Stefan is an active Crypto, Forex and general investment researcher advising blockchain companies at their start up level. He keeps fit by mountain biking, surfing, skiing and lots of other adrenaline sports.


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