What is the Lightning Network

 

Lightning Network has to do with Cryptocurrency, especially Bitcoins. Bitcoin is the first, most reliable and most popular cryptocurrency. As great as it is though, it has its shortcomings. Though one can transfer large sums using the peer-peer method, it takes about ten minutes at least for a transaction to be approved, this is a very disappointing delay in comparison to those operating with credit card companies, so that limitation is what brought about the invention of the Lightning Network.

 

The concept of Lightning Network was first proposed by Joseph Poon and Thaddeus Dryja in the year 2016, they published the Lightning white paper and it is still undergoing several developments as the whole concept and cryptocurrency system is.

In December 2017, some interoperable test transactions were carried out on Bitcoin core implementations.

 

The Lightning Network concept was endorsed by mobile payment entrepreneur Jack Dorsey in March 2018.

 

In simple terms, Lightning Network is a second layer technology for Bitcoins, it is the payment protocol that operates on top of a blockchain base like Bitcoins, this helps fast transactions between participating nodes and it is said to be the solution to Bitcoins scalability problems. It works based on a peer-peer medium for making small or micropayments of cryptocurrency through a network of bidirectional payment channel without a third party. It also simplifies atomic swaps.

 

Features of the Lightning Network

Instant Payments: this makes transactions faster because it doesn’t worry about the blockchain confirmation times. The payment speed is measured in milliseconds to seconds, the security of the stem is enforced by blockchain smart-contracts without creating an on-blockchain transaction for individual payments,

 

It Is Scalable: unlike going through the first tier Bitcoins payment transaction system, the Lightning Network makes millions to billions of transactions per second across the network possible. There is no need for custodians; it goes directly from person to person, it blows away legacy payment rails. This issue of scalability is solved by creating a second layer on bitcoin’s main blockchain, this consists of multiple payment channels between parties or bitcoin users, so, the parties can make or receive payments from each other.

 

Low Cost: It is done for much lesser fees and can be used for emergency cases such as instant payments because the Lightning Network allows for instant payment without the involvement of blockchain approval.

 

Cross Blockchains: This makes it possible to conduct a transaction without the third party custodians so long as the chains can support the same cryptographic hash

 

How It Works

The Lightning Network depends on the underlying technology of the blockchain; it uses real Bitcoin blockchain transactions by using its smart contract scripting language, thereby enabling the creation of a secure network of participants which helps transactions to be done in high speed and at a higher volume.

 

It is done when two participants create a ledger entry on a blockchain which requires them to sign off on any spending of funds, the first transaction is called The Funding Transaction and it is created when both parties fund a channel. So they both return the funds to their individual allocation and create many transactions between themselves by exchanging a single key that is used to validate spending transactions known as commitment funding but they do not publish it on the blockchain. They only publish the opening and the closing transaction.

 

The most recent transaction is valid which is enforced by blockchain-parsable smart contract scripting. The entry on the ledger can be closed out at any time by the parties involved without any trust or custodianship by broadcasting the most recent version to the blockchain.

 

Therefore, by creating a network of these two-party ledger entries, we see that there is a possibility of locating a path across the network which is similar to routing packets on the internet. There are nodes along these paths and they cannot be trusted because the payment is enforced using a script which enforces atomicity rather the entire transactions succeeds or fails.

 

Based on this, you can conduct transactions off-blockchain without any kind of limitations. So it is like making legal contracts without necessarily having to go to court for every contract to ensure its legality, the same way, you can transact an off-blockchain transaction with the same confidence of the on blockchain transaction.

 

In other words, the parties involved can conduct as many transactions as possible in a shorter period of time because they do not need any special approval from the blockchain. Individual payment channels between the various parties come together to form a network of lightning nodes that can route transactions among themselves. The interconnectivity between the payments channels is simply known as the Lightning Network.

What is Ethereum

What is Ethereum

What is Ethereum

Many people are aware of the cryptocurrency world; many are familiar with the term, Bitcoin.  But if you are one, then Ethereum will not be so foreign to you. If you are not aware, no need to worry, see this as your guide to the internet world where transactions are carried out without cash as the currency.

Ethereum is a decentralized (open source, public) blockchain-based computing forum for money and new forms of applications featuring it affords you the opportunity to write codes that can monitor and control money and also develop applications that are accessible anywhere around the globe.

What is Cryptocurrency

What is Cryptocurrency

If you are yet to hear of cryptocurrency by now, we could say you are far behind trends but you are probably not alone. But if you have heard of it, then there are probably more details that you need to learn about it. Now, that you know that, let’s proceed.

Over the years since the invention of currencies, as technology increased, there have been several attempts to create mobile money, it is true that there are e-transactions now where one can send money via the internet to another entity but there is still one major limitation that has made cryptocurrency a different and a better option for most people.

One major advantage this has is the fact that it bypasses the third-party financial institutions such as the banks. It doesn’t require the endorsement of a bank or the close monitoring of Government. There is no central bank involvement to sanction anyone for having too much money. The decentralized structure of the cryptocurrency has made it a more reliable way of saving and even investing money.

Cryptocurrency works through the peer-to-peer method. This simply means that you don’t have to use your social security or credit score as collateral, it allows you to be pseudonymous because you don’t need to enter your personal bio-data, you just need a digital address (that will be explained further). In other words, cryptocurrencies are like virtual accounting systems that keep a record of all transactions. The transactions are bundled into blocks, which are cryptographically signed (hence the word “crypto” currency) and the client doing the signing gets some number of units of virtual currency (and potentially transaction fees) as a reward for doing the work of calculating the cryptographic signature.

You can make some heavy duty transfer of money to your family without any internal or international financial body restrictions. 

One other exciting thing is the fact that people can only send what they have, transactions are secured using cryptography, you can’t spend the same unit twice, and this eliminates the risk of fraud. If you are transferring units to someone else, be sure of the transfer because there is no reversal, there is no central body to oversee this kind of case. So, going further to the big question, what is a cryptocurrency?

 

What is Cryptocurrency?

Cryptography is made up of two words, Cryptography and Currency, so before we give meaning to the word in itself, let us know what those two terms are

First, let’s define what normal currencies are; according to Wikipedia; currency is money in any form when in use or circulation as a medium of exchange especially circulating banknotes and coins. It is a system of money in common use, especially for a people in a nation.

A currency is token generally accepted in a country for transactions and as a means of exchange for goods and services. This can be in paper form or coins but now, with the invent of cryptocurrency, it can also be said to be not just in hard tokens that can be seen and touched but in a soft token which makes it virtual. So beyond what we know as money, actual money, there is the virtual money which cannot be touched or seen but the value cannot be denied.

So currencies allow people to convert their efforts into something that maintains its value, it is used to measure the value of a good or service and can be used at a later time.

Cryptography, on the other hand, is the study of secure communications techniques using codes that can only be understood by the sender and the recipient. It is converting a plain text to unintelligible codes that can only be decoded by the party it was meant for. It is a secure path restricting an unauthorized body from accessing the information that has been encrypted in the message. The recipient has a secret key that is used to convert the messages back to plain text to make it readable. This is used to secure credit card information, e-mail messages and some corporate data. The encrypted information gives authentication to the message, it cannot be copied or altered by a third party, and it can also be confirmed by the recipient.

Now that we have an understanding of what the two terms are; let us move further by defining the word “CRYPTOCURRENCY”

Cryptocurrency is a medium of exchange value(just like ordinary money, cash or coins) that is digitalized and relies on encryption, which guarantees the security of transactions. It is a new way of payment for goods and services that get rid of the intermediaries or a central financial institution represented by banks eliminating all commission fees and the unnecessary bank charges and what have you.

The core of cryptocurrency is the security of the transaction which is provided through a blockchain technology that serves as a public financial database. This is purely mathematical in nature.

It is a digital asset that uses strong cryptographical codes to secure financial transactions. Cryptography is used to monitor and control the creation of extra units and verification of the transfer of assets.

According to Jan Lansky, a cryptocurrency researcher who considers cryptocurrency a futuristic currency that would be widely used; he said Cryptocurrency is a system that meets six conditions

  • The system does not require a central authority; its state is maintained through distributed consensus.
  • The system keeps an overview of cryptocurrency units and their ownership.
  • The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
  • Ownership of cryptocurrency units can be proved exclusively cryptographically.
  • The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.
  • If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs, at most, one of them.

Clearly, cryptocurrency is the next thing as far as the future of currency is concerned an understanding this is important for you and I.

How Cryptocurrency Works

How Cryptocurrency Works

You have probably wondered how cryptocurrency works; you are not alone and that is what this article is for; to provide insight on the workings of cryptocurrency. To understand how Cryptocurrency works, let us consider these;

  1. Public Ledgers: All confirmed transactions are stored in a public ledger, to monitor that the person with the encrypted address is no spending beyond the coins available. Because it can be viewed by all, it reduces the risk of theft.
  2. Transactions: The transfer of funds between two digital wallets is called a transaction. The transaction is published in a public ledger and the Miners approve it and get their reward after confirming that the transaction can from the owner of the wallet. It may take some time, about 10 minutes in Bitcoins to get confirmed and added to the public ledger.
  3. Mining: Mining is the process of confirming transactions and putting it in a public ledger after solving some complex mathematical puzzle. The transaction is open such that anyone can do the mining duty and confirm and after it, they show their proof of work and get some cryptocurrency to their wallets as a reward for the job done.
Cryptocurrency Wallet – A Step by Step Guide

Cryptocurrency Wallet – A Step by Step Guide

What is a cryptocurrency wallet?

I am sure you must have come across that term before but what exactly does it mean?

These days, there is so much talk about cryptocurrency in recent times, even though it has been in existence for a few years now.

You have probably heard about it – even if you haven’t in details.

As expected, there a number of terminologies used with cryptocurrency and cryptocurrency wallet is one of them. So, what is cryptocurrency wallet?

A cryptocurrency wallet is a software program that stores private and public keys and interacts with various blockchain to enable users to send and receive digital currency and monitor their balance. If you want to use bitcoins or any other cryptocurrency, you will need to have a digital wallet because that is where you get to control all transactions. When someone sends you Bitcoins or any type of digital currency, the transaction cannot be reversed because they have signed off ownership, there are no real or physical coins but there are published ledgers to show the balance of how