Bitcoin is getting popular day by day. But, still it has the scalability issue. Many believe that Bitcoin can never become a method of payment. Many users complained that they have to wait long for the transactions in order to confirm. In addition, they had to pay excessive fees for their transactions. Here is where lightning network can help Bitcoin network to solve the scalability issue and make transactions faster and cheaper. The main problem is that Bitcoin network can only process 7 transactions per second. As a result, the transactions take long to confirm and fees are excessive. In this article we are going to talk about altcoins with lightning network support.
In fact, Lightning Network creates an extra layer over the main blockchain of Bitcoin. All the micro transactions happen in Lightning Network. Once the channel is closed, the transaction will record on the main blockchain.
Since, Lightning Letwork created, altcoins also started to use it in order to make the transactions cheaper and faster. Even some altcoins created their own version of Lightning Network. Let’s take a look at different altcoins, which use the Lightning Network or developed their own.
Litecoin and Lightning Network
Litecoin Known as a silver to Bitcoin’s gold. In fact, Litecoin is a fork of Bitcoin. As a result, it’s no wonder that it has the scalability issue as well. However, Litecoin’s transaction fee is around $0.40, still developers looking to upgrade this cryptocurrency. The issue is that, if, Bitcoin’s Lightning Network goes mainstream then the Litecoin’s transactions fee turns from an advantage to a disadvantage over a night. So, it’s essential for Litecoin to use Lightning Network as well.
Ethereum and Raiden
Ethereum blockchain is faster in terms of transaction speed compare to Bitcoin. It means, it takes shorter time to confirm transactions. Ethereum can process 20 transactions per second, which is three times faster than Bitcoin.
In fact, Ethereum’s blockchain uses for different purposes. It works as a payment system as well as enable decentralized applications (dApps) and initial coin offering (ICO). As a result, Ethereum’s network in busier than Bitcoin. For those reasons, it’s no wonder that Ethereum faces with scalability issue as well. Ethereum came along with different solutions. But, the most efficient one is Raiden.
Raiden’s concept is very similar to Lightning Network. It provides an extra layer outside of the main blockchain. By using this network, users can create two-way channels in order to perform instant transactions with minimum (almost free) transactions fee.
The major difference between Raiden and Lightning Network, is that Raiden is ERC-20 compatible. It means that every single token issued on Ethereum blockchain will work with Raiden as well.
ZCash and BOLT
One of the issues with Lightning Network is that it makes transactions on transparent blockchains such as Bitcoin more private. In fact, in Lightning Network all the micro-transactions made by its two-way channels and don’t require to spread to the entire network. However, still the channel’s closure and opening will leave records. This record will leave for both participants of the transaction. In addition, it leaves the record of the initial and final splits of funds.
From first days, Zcash aimed to provide anonymous and private transactions for its users. As a result, they need to have their own solution in order to scale their blockchain. For this reason, they created an extra layer called ”Bolt”. “Bolt” is similar to Lightning Network in some ways, but they are different.
The difference between Lightning Network and Bolt is that Bolt aimed to make the transitions, which performed within the channels unlinkable. Bolt network does it by using two main classic methods. The first is signature, which allows users to sign transactions without revealing their identity. The second is commitment, which will hide the value of the payment.
Altcoins With Lightning Network Support; Ripple
Ripple designed in a way to be able to perform a lot of transactions. As a result, it doesn’t require creating an extra layer. Ripple website stated that its network can process 1500 transactions per second. In fact, they believe that Ripple can compete with Visa’s network.
Even though Ripple collaborated with Bitfury in order to integrate the Lightning Network into Interledger. In fact, Interledger is Ripple’s protocol, which developed in order to enable transactions between different blockchains.
However, Ripple is not really interested in Lightning solution in order to extend its network capabilities. But, they adopted Lightning in order to make use of its atomic swap technology. In fact, they want to take another step to get closer to compatibility of different cryptocurrencies.
Altcoins With Lightning Network Support; Monero
Monero is another cryptocurrency, which focused on privacy. As a result, implementing Lightning Network would not be a good idea, because it would not fully work for it. However, developers planned to add a second layer to the network. So, in this case, Lightning Network could be suitable choice.
In fact, developers focused on the Lightning Network’s atomic swap technology, not its scaling capabilities.
NEO and Trinity
NEO and Ethereum are very similar. They both are service platforms, which make users be able to run decentralized applications, hold ICOs and execute smart contracts. So, it’s necessary for the network to have an off-chain scaling solution. As a result, the developers introduced “Trinity”.
Trinity is still under development and developers are not in rush to release it. The main reason is that NEO network can process around 1000 transactions per second.
Trinity, Lightning Network and Raiden are very similar together. The main difference between those three solutions is the underlying technology.
Altcoins With Lightning Network Support; Stellar
Stellar already can process about 1000 transactions per second. Jed McCaleb, the founder of Stellar, stated that Stellar’s blockchain can scale easily in order to process more transactions.
However, it’s not necessary for Stellar to extend its capabilities, McCaleb, stated three major benefits to use Lightning Network for this cryptocurrency. The benefits include privacy, scalability, and interoperability. In addition, he believes that Lightning Network can make Stellar transactions faster than now.