A Brief History of The Lightning Network ⚡️
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Bitcoiners,
Bitcoin has a problem.
Everyone in the world CANNOT use it to buy coffee today. After all, it's supposed to be currency... right?
Luckily, there is a solution.
Here is a brief history of The Lightning Network so you can understand why it needed to be created for Bitcoin to scale and be used as currency in the future.
The Problem
Bitcoin's base layer optimizes for security and decentralization. But that comes with trade-offs as it is not optimized for micropayments. To be used as a currency, Bitcoin must find a way to scale globally without compromising its security.
In 2009, the creator of Bitcoin, Satoshi Nakamoto, knew of this scaling problem. The release of Bitcoin Version 0.1 included a few lines of rough draft code referencing payment channels. Satoshi was already planning a solution to Bitcoin's scaling problem.
The Solution
Bitcoin developers proposed several solutions to Bitcoin's scaling problem from 2011-2015 by elaborating on the idea of payment channels.
In early 2015, two devs named Joseph Poon and Thaddeus Dryja proposed a new solution called "The Lightning Network."
Developers began coding different implementations. These implementations took the theory drafted by Poon and Dryja and began making The Lightning Network reality. You may have heard of these implementations such as:
c-lightning
eclair
lnd
In 2016, the original authors teamed up with Elizabeth Stark and Olaoluwa Osuntokun to start Lightning Labs. The new company was founded to continue building out the "lnd" implementation in Google's Go programming language.
At this time, several different implementations were trying to bring The Lightning Network to life.
The big question was:
"How can we make all these implementations interoperable (ie work together)?"
The solution was to introduce new protocol specifications named BOLT.
BOLT
Basis Of Lightning Technology or BOLT are specifications that describe the consensus rules and standards of the Lightning Network. Thanks to BOLT, there is now one protocol standard for The Lightning Network.
With BOLT connecting most of the previously built implementations, there now was a path forward to begin making Bitcoin micropayments in real life.
In late 2017, an early Lightning pioneer named Alex Bosworth made one of the first real consumer transactions using The Lightning Network.
Since that first consumer transaction sent over 5 years ago, The Lightning Network has grown exponentially. Solving exactly what it was created for: Bitcoin's scaling problem.
Today, over 5,500 BTC worth more than $150 million USD is locked in the network.
That’s a wrap on the history of The Lightning Network!
In next week’s newsletter, I will send you more information on the current state of the Lightning Network and a prediction on what the future holds for Bitcoin and The Lightning Network as it matures. Stay tuned!
Happy Monday,
-Pod
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Twitter: @epodrulz
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Disclaimer: This should go without saying: This is not financial advice. This is not investment advice. I write this newsletter for education and entertainment. Act accordingly.
