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Lightning Network Shows 99 Percent Failure Rate on Large Bitcoin Transactions

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

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Nano (NANO) The Sleeping Giant

Nano (NANO) is the rebrand of a project and coin formerly known as Raiblocks (XRB). The rebranding took place in late January in an event that would cause a 41% price surge of the coin in 24 hours. Nano (NANO) was trading at $18.84 on the day of the rebranding. Nano has also seen exciting times in the first days of January when it was trading at $37.34. The same coin, but under the name of Raiblocks (XRB) was only trading at $0.20 on December 1st. Doing price comparisons, $37.34 is a 18,570% increase in value from $0.20 and a 4,435% increment when you consider the current trading value of $9.07 less than 4 months later.

It is with such figures that Nano (NANO) can be declared as a sleeping giant that not too many traders have recognized in the crypto-verse. But that is soon to change as more and more crypto-traders have come to notice the massive potential in this coin  that has a circulating supply of 133,248,289 and a maximum supply of the same amount. This is because Nano has been full mined eliminating the need for transaction fees charged for verifying transactions in a process known as mining. This is the process seen in Bitcoin (BTC).

The Nano (NANO) coin and project was launched in 2015 and offers instant transactions with zero fees. Yes. Zero fees. Also, each account on the Nano platform has its own blockchain as part of a larger directed acrylic graph. Each individual provides the computational power for the verification of their own transactions. This means that the entire network does not need to update the overall ledger together in massive blocks. Nano can also process one thousand times more transactions per second than Bitcoin.

This makes Nano (NANO) ideal for trading pairs in exchanges, instant peer-to-peer micro payments and any transaction that requires quick processing. This is boosted by the fact that Nano has working wallets on Android, iOS, Windows, Linux and MacOS. As soon as these wallets become mainstream, Nano (NANO) will become a household name.

Also to add, is the integration of Nano on the social media platform known as Twitch. This means that anyone who streams on Twitch can recieve Nano (NANO) instantly from their viewers. The tips or donations will be free of transaction fees as mentioned earlier.

In conclusion, anyone watching the crypto currency market is sure to spot the progress of Nano (NANO) and its infinite possibilities moving forward. I for one, will start snatching the coin in the markets as soon as my next paycheck kicks in. The Lambo is not too far away.