{"id":22976,"date":"2017-11-16T22:48:55","date_gmt":"2017-11-16T22:48:55","guid":{"rendered":"http:\/\/ci027cfe65f01426c3"},"modified":"2017-11-16T22:48:55","modified_gmt":"2017-11-16T22:48:55","slug":"lightning-network-now-supports-transactions-across-blockchains","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/technical\/lightning-network-now-supports-transactions-across-blockchains","title":{"rendered":"The Lightning Network Now Supports Transactions Across Blockchains"},"content":{"rendered":"
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Although still in testing phase, the<\/a>lightning<\/a>network<\/a> can now be used to send transactions across different blockchains. The Lightning Labs<\/a> development team successfully swapped testnet bitcoin for testnet litecoin through a lightning channel this week: ownership of the coins changed hands, while no transaction was recorded on either blockchain.<\/p>\n

\u201cPrevious atomic swaps that I have done were on-chain, and had the on-chain limitations of slow [transactions] and high transaction fees,\u201d Litecoin creator Charlie Lee told Bitcoin Magazine<\/em>, referring to an older trick<\/a> to exchange different types of coins trustlessly. \u201cOff-chain atomic swaps are significantly better. They are instant, [have] low fees, and better protect one\u2019s privacy.\u201d<\/p>\n

The successful test paves the way for trustless cryptocurrency exchanges, near-seamless multi-coin payment processors and more.<\/p>\n

Bitcoin and Litecoin<\/h2>\n

The lightning network is the highly anticipated second-layer payment network to be deployed on top of Bitcoin. And as an open protocol, it\u2019s relatively easy to deploy lightning network support for other cryptocurrencies that are forked from Bitcoin\u2019s codebase \u2014 like Litecoin.<\/p>\n

Interestingly, if the lightning network runs on different blockchains, these chains can effectively be linked together. If one or several peers on the network are willing to take one type of coin and forward another, it\u2019s possible to send bitcoins on one end of a channel that will end up as the equivalent in litecoin on the other end.<\/p>\n

In a Medium post<\/a> published in the first week of 2017, Lee explained that this potential to create these kinds of \u201cbridges\u201d between cryptocurrencies made him throw his weight behind the Segregated Witness (SegWit) soft forks on both Litecoin and Bitcoin. <\/p>\n

When SegWit activated on Litecoin last spring, Lee\u2019s vision came one step closer to reality. Because the soft fork had not yet activated on Bitcoin at that time, Lightning Labs decided<\/a> to add Litecoin support to their LND<\/a> lightning network implementation. Thus, by the time SegWit activated on Bitcoin last summer, LND was already compatible with both chains.<\/p>\n

The testnet versions of these two blockchains are now made interoperable through the lightning network for the first time, allowing users to swap one type of coin for the other.<\/p>\n

\u201cThe primary advantages over previous solutions are speed, cost and privacy,\u201d Lightning Labs developer Conner Fromknecht told Bitcoin Magazine<\/em>. \u201cTransfers are more or less instant, and don\u2019t require the cost of an on-chain transaction. Additionally, in the cooperative case, the transactions are never broadcast, and leave no trace on the blockchain, offering privacy benefits. And with any luck, these privacy benefits will only continue to improve.\u201d<\/p>\n

The Test (and the Potential)<\/h2>\n

This week\u2019s specific test was done on a local machine, on which Fromknecht himself created two nodes: \u201cAlice\u201d and \u201cBob.\u201d These two nodes were modified to be able to monitor both the Bitcoin and Litecoin testnets. Fromknecht then created a single lightning channel that sent testnet litecoin from Alice to Bob and testnet bitcoin back from Bob to Alice at a fixed exchange rate. While still all in an experimental setting, the test was successful; Lightning Labs today published a blog post<\/a> and a video<\/a> detailing the results. <\/p>\n

In addition to offering a faster, cheaper and more private solution to exchanging coins, the successful test paves the way toward a whole new range of possibilities in the context of the lightning network. For example, peers on the network could eventually act as cryptocurrency exchanges, competing with one another to offer the best exchange rates.<\/p>\n

\u201cArguably the most important benefit of Lightning swaps is the ability to efficiently exchange different currencies without a custodian,\u201d Fromknecht said. \u201cOur ecosystem heavily depends on exchanges to fulfill this role today, but Lightning swaps offer users a choice to get the best of both worlds \u2014 instant exchanges without relinquishing control of your money.\u201d<\/p>\n

Similarly, such exchangers could act as payment processors: it would be much easier for users to spend litecoin at merchants that only accept bitcoin (or vice versa). And it\u2019s even conceivable that bitcoin-to-bitcoin payments over the lightning network will route via Litecoin hubs, if that\u2019s the cheapest way to get funds from A to B. <\/p>\n

For Lee, at least, this is not as unlikely as it sounds, and the successful tests mark another step toward his vision for the lightning network on Litecoin and Bitcoin.<\/p>\n

\u201cThe Litecoin team is excited to work with Lightning Labs to explore the true potential of instant cross-chain atomic swaps,\u201d he concluded.<\/p>\n

For a more in-depth technical explanation of these kinds of atomic swaps, see our previous article \u201cAtomic Scaps: How the Lightning Network Extends to Altcoins<\/a>\u201d or the blog post<\/a> and video<\/a> published by Lightning Labs today.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Although still in testing phase, the lightning network can now be used to send transactions across different blockchains.<\/p>\n","protected":false},"author":2509,"featured_media":22977,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[1252,460,3343,705],"class_list":["post-22976","post","type-post","status-publish","format-standard","has-post-thumbnail","category-technical","tag-lightning-labs","tag-lightning-network","tag-litecoin","tag-scaling"],"author_data":{"id":2509,"name":"Aaron van Wirdum","nicename":"aaron-van-wirdum","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/aaron-van-wirdum-96x96.jpg"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/the-lightning-network-now-supports-transactions-across-blockchains.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/22976","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2509"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=22976"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/22976\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/22977"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=22976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=22976"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=22976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}