As blockchain technology becomes increasingly popular and it is investigated for use in numerous solutions, especially for the internet of things, there exists a need for methods of adapting the technology to serve a much larger market than it was originally intended for. As discussed in a previous blog post, current blockchains are not yet proven viable for mass adoption but one method of scalability that is now being put into effect is the ‘Lightning Network’. Under this solution, much of the work will be carried out off-chain in private channels to avoid burdening the blockchain with too much data.
With a Lightning Network, blockchains would be able to process transactions at an unprecedented rate and for negligible fees, which would be of particular importance when examining their viability for IoT uses and micro-payments. Another effect of the Lightning Network would be to make payments nearly instant, as on-chain confirmation times would not be required to provide the security of the transaction. It is estimated that this method would enable millions to billions of transactions per second, minimal fees and millisecond processing times.