Benefits of the Bitcoin Lightning Network!

Bitcoin Lightning Network

With the proliferation of bitcoin, the traditional banking system is being disrupted. This new emerging technology has been criticized for lacking regulation and established infrastructure.

Platforms like help you master bitcoin trading even if you don’t have any prior knowledge of bitcoin trading. However, there are many benefits that bitcoin can offer to both financial institutions and end users. The network is lightning fast with a transaction period of seconds, reducing third-party fees or eliminating them, saving on transaction costs.

 The technology also protects personal information with little risk of identity theft. When considering innovative supply chain management solutions, companies should explore all options before deciding, as this industry is ever-changing and evolving every day. 

Bitcoin is an alternative payment system that enables users to make P2P (person to person) transactions. It means that the money can be transferred directly from the payer to the payee without any involvement of a third party. The exchange of money is fast and secure, which relieves intermediaries of a lot of work, including checking, waiting, transferring, and handling money. 

It is being widely adopted by large corporations such as Microsoft, Dell, Shopify, and Expedia to reduce costs while delivering faster services. In addition, Bitcoin payments are widely accepted in specific industries, including the gaming industry, where location-based game items like coins can be purchased and deposited into a virtual wallet address on your phone or PC without physical access.

Let’s explore the advantages of a Bitcoin lightning network over other digital currencies and traditional finance ecosystems. 

Bank fees

In traditional banking, payment processing usually belongs to expensive banks. A bank holds the money from individual account holders and then releases it to the merchant when there are no more pending transactions. Every transaction has two basic fee types: a transaction fee and an internal transfer fee. The bank charges transaction fees for every single transaction that is requested. 

They are typically pretty small but can be significant, especially if you have a large volume of transactions each month that require many fast confirmations. Internal transfer fees refer to those charges imposed on a customer’s account by their respective banks for making payments to other customers within the same bank. But in the case of bitcoin, there is no concept of banking fees, and you merely have to pay minimal transaction fees. 

Bitcoin Lightning network dominating other cryptocurrencies

There are about 1500 cryptocurrencies worldwide, out of which bitcoin has the highest market cap, which is more than twice the combined valuation of all other cryptocurrencies. It can be attributed to its ability to be scaled and used as a legitimate currency for daily transactions. 

Bitcoin (BTC) is like the digital gold that exists in cyberspace. While the lightning network of bitcoin allows you to make instant and low-cost transactions, it’s being adopted by many merchants as part of their payment ecosystem. Walmart, Tesla, WordPress, and much more companies have already started accepting bitcoin as a mode of payment and will continue to grow in 2022 and beyond.

When was the Bitcoin lightning network introduced?

The community in early 2015 made, the lightning network’s first implementation in bitcoin. The lightning network is designed to enable faster transactions while reducing their cost. It requires time to verify a transaction, wait until the miners confirm it, and release a block containing all the transactions that went through over the past few minutes. 

These blocks are reusable multiple times for additional payment channels, just like what you find in software network systems where one can make multiple applications or file-sharing networks connected on the medium of data transfer going through nodes or clients.

How has the lightning network improved the efficiency of bitcoin?

There is a time gap between when the bitcoin transaction is made, and it gets confirmed. The lightning network fills this gap enabling faster transactions and improving its efficiency. The lightning network is just a layer that sits on top of the bitcoin blockchain and removes some limitations such as making instant payments, scalability, and privacy issues.

It has created a way to send and receive bitcoins without waiting for the miners to confirm your transaction. The node is a critical component of the bitcoin network as it’s what handles all the transactions on the blockchain. But in the case of a lightning network, nodes are reduced from over 1000 individual nodes with just one single hub node that maintains all the channels. 

The payment channels through which bitcoins flow through can be disconnected and re-connected on both ends to exchange Bitcoins without having to wait for a miner to verify them again. The lightning network is designed so that it doesn’t necessarily need complete information about the individual nodes or balances at every time.


The Bitcoin lightning network has revolutionized the way we transact our money. A decentralized P2P payment system enables instant and cheap payments while removing third-party fees. 

Bitcoin is highly versatile and changing at an exponential rate to cater to the needs of the end users. Moreover, the cryptocurrency is fast, secure, low cost, and digital, making it one of the best fits for its ecosystem.

The Lightning Network (LN) allows users to make payments directly via blockchain through payment channels by providing off-epsilon payments where every micro-transaction is broadcasted on the chain as well as off-chain before they are bundled together into a single transaction block that makes it available on the blockchain for all other users to use.

Bitcoin lightning network article and permission to publish here provided by Jean Nichols. Originally written for Supply Chain Game Changer and published on October 17, 2022.