3 ms·
It's a trade off. Think of the difference between paying the deposit on a house vs. buying a coffee. Need a large transaction to settle with a high degree of s
by Quindecillion 4y ago
It's a trade off. Think of the difference between paying the deposit on a house vs. buying a coffee.
Need a large transaction to settle with a high degree of security and finality, but "slowly" (i.e. ~10 minutes)? Do it on-chain.
Need a small transaction to settle instantly and cheaply, but you trade that for some security and finality? Do it on the Lightning Network.
Similar trade offs already exist in traditional finance. See inter-bank transfers and things like FedWire compared to payment networks like Visa and Mastercard.
Some of those inter-banks transfers can take days to weeks to settle with finality and can be expensive. Bitcoin can settle in ~10 minutes relatively cheaply.
Credit card payment networks charge a 1.5-3% fee on each transaction. Transactions on LN are a few sats or fractions of a sat... practically free. Automated micro-transactions are now practical with LN [1].
Also, the Lightning Network isn't a blockchain.
[1] https://lightninglabs.substack.com/p/streaming-sats-why-bitcoin-is-not https://lightninglabs.substack.com/p/streaming-sats-why-bitc...