Lightning Labs has released a new feature aimed at improving the usability of the lightning network, a bitcoin payment channel technology aimed at scaling the cryptocurrency.
Called “Lightning Loop,” users will now be able to receive bitcoin in increasing quantities without having to close and reopen new payment channels.
Opening a payment channel requires users to pay the same fees and wait the same amount of time as sending a regular bitcoin transaction the blockchain. However, once the payment channel is opened, a user is able to send bitcoin payments almost instantaneously and at a fraction of the cost.
Normally, these payment channels are set up by users with a fixed capacity.
As Lighting Labs developers Alex Bosworth and Bryan Wu described in a blog post:
With Lightning Loop, this inbound capacity can be withdrawn so that users can keep using the same payment channel to receive bitcoin.
In essence, the Lightning Loop moves funds out of a payment channel and “into a bitcoin wallet, cold storage, or fiat currency via an exchange,” Bosworth and Wu explained in their post. “This emptying of the channel allows [a lighting user] to receive more payments.”
Calling it the “Loop Out” feature, Bosworth and Wu also highlighted that they were currently working on an opposite “Loop In” feature to enable payment channel refills with “on-chain bitcoin from wallets or exchanges.”
“We believe Loop will contribute to the efficiency, scalability, and usability of Lightning. We encourage any Lightning developers, testers, and enthusiasts to begin trying Loop today," they added.
Since the alpha release of the tool, Lightning Labs has been receiving positive reception from users with product development director of bitcoin wallet Conio, Marco Pesani, going so far as to tweet:
Elizabeth Stark via CoinDesk archives
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.