The Lightning Network is under development, but did you know you can already make Lightning transactions on the Bitcoin testnet? In this tutorial I explain how it works...
How does the Bitcoin Lightning Network work?
Let's say you want to give 1 Bitcoin to your friend Bob. You open a payment channel on the Lightning Network (LN) to give him 1 BTC which requires 1 transaction on the Bitcoin blockchain. You pay the BTC fees for opening the payment channel and you now have a channel where a maximum of 1 BTC can freely move between you and Bob without paying high transaction fees.
Later you open a payment channel on the LN with a Bitcoin exchange to deposit an x amount of BTC. Your friend Bob can now send up to 1 BTC to this Bitcoin exchange through your payment channel, paying you a tiny fee.
It is expected this will lead to a couple of central hubs with many connections that everyone wants to connect through. The Bitcoin exchanges are likely to play a major role in this.
How to test the Bitcoin Lightning Network
You can now try a Lightning transaction on the Bitcoin testnet. Here's how it works:
1. Go to this site: https://htlc.me
HTLC.me is a web-based Lightning Network wallet. There are more Lightning Network wallets available already (i.e. Eclair Wallet for Android), but I use HTLC.me in this tutorial, because it is web-based and very easy to use.
After you clicked "Got it, I wrote it down", you receive some free tBTC. This is no real Bitcoin, the "t" is for "testnet".
2. Your first payment
Visit https://yalls.org and click on an article you would like to read. To read the full article you have to pay a few tBTC Satoshis worth about $0.01.
Click 'Continue reading' and copy the payment request to your HTLC.me Lightning wallet as in the images below.
Click "Send Payment".
Now go back to the site to read the full article and you will notice that the transaction has been confirmed instantly. This got done faster than I can switch the tabs in my web browser!
Thirsty? You can now also buy a cup of coffee with a Lightning transaction on https://starblocks.acinq.co. All of this is still under development, but it looks really promising.
Lightning Network Explorer
This explorer displays the topology of the Bitcoin Lightning Network and lists all known nodes.
https://explorer.acinq.co
The Lightning Network will be a game changer for Bitcoin!
When it is fully implementing, BTC price will roar to the moon.
wow, looking forward to the day that it is consumer ready!
Cool Post. I'm going to have a play with it.
The way things are going, I hope they ramp up the testing to the earliest release date possible!
The fees and transaction speeds really needs to be fixed before people start jumping ship in mass.
Very good, thanks for the info.
I need to understand more about LN. Do you think that it will reduce the descentralization? because in my understand I send my money to a third person that allows me to pay to someone. Is it like that?
No. It's like the way the Internet forwards packages from your computer or mobile device to the webpage. It goes through serveral intermediate hops. In LN, you send your money through LN nodes, until it reaches the destination. It does this in such a way that the intermediate hops cannot take that money.
awesomw
Definitely interested in seeing what the fees are for this and how fast it works. BTC is its own worst enemy right now...
Thanks to share 😎😎😎😎
thx for share this article
Nice post @penguinpablo very important, I will wait next post.
מצוין, תודה רבה.
Thanks for sharing this amazing article...
upvoted...!!!
This could be the solution to Bitcoin slowness and maybe even the fees
Thank you. Good info!
This is a way to avoid high BTC fees?
This is something much needed as I see numerous people pissed off paying very high fees while buying Bitcoins. Thank You!