What is Lightning Network?
The main idea of Lightning Network is rooted in fact that not all transactions need to be recorded in block chain as it may lead to an overload.
Lets assume the users are doing balance transfers several times, in which case its not a necessity to register the transfer every time when transaction is done. It will be sufficient enough to merely open the payment channel of its own kind and put on record any details about the opening in block chain. Now this channel will remain opened as long as it is necessary.
But when we decide to close it, we'll simply record in block chain the results of all transactions that were made in that channel. If we are to follow this idea, a whole network of channels can be created for payments and therefore the transactions in blockchain will be used much less often.
Lighting Network in Bitcoin Chain.
An impressive growth is manifesting itself in seven micro payment of Lightning. However, experts are expressing their concerns regarding its possible centralisation. An attention of leading block analyst Larry Chermak has drawn his attention on this matter by highlighting the fact that Lightning Network now has about 5500 nodes, the number of opened channels has almost reached 22k, however its capacity in chain in USD dollar equivalent equates to $2 million USD.
Larry however draws his attention on less pleasant tendency and outlines that 20 public nodes with add-ons to 365.59 BTC (approx. $1.3 million) belong to one player.
I'm talking about the LNBIG.com project which in this case controls 64% of chain capacity of lightning network. With this in mind, the number of nodes on LNBIG.com only makes 0.7% out of the whole average.
The experts seem to draw attention to fact that as oppose to growth of nodes numbers, the growth of chain capacity has not been very linear recently. The remarkable growth has been recorded in November last year, the LN capacity has grown by 300% in two weeks time.
As Larry Chermak has mentioned, critics of Lightning Network often mention that network centralisation can be manifested as a result of appearance of few significant nodes. Back in June 2018, the experts from Diar have outlined that 10 significant at that point in time nodes have covered 53% of chain capacity. In present moment, this figure has gone down to 38%, never the less it is obvious that significant nodes still have big impact and potentially can have a negative impact on the entire chain.
Attack 51%: As a possible consequence of centralisation?
Recently, on the 7th of January 2019, an attack on the Ethereum chain has been conducted. The developers initially have denied the attack 51% on the chain of this cryptocurrency. On Monday the same day they have admitted this fact suggesting that an attack was related to testing of new miners. Few days later however, the organiser of the attack has returned all of the stolen funds back to stock exchange Gate.io in the amount of $100 000. This story clearly shows the vulnerability of block chain and pushes our society to draw conclusions to be more aware and careful in future. An attack of such types usually happen with purpose to reorganise blocks so that hackers can perform transactions (few examples of these include sending coins to stock exchange, awaiting for confirmation , or even sell them and extract out bitcoins) and then launch an alternative more dominating hash rate chain with the purpose of creation new alternative chain. As a result the history of a block chain model will be re written in such way that the record of coins sent to stock exchange will not be saved.
In a block chain with an algorithm "proof of work" there is a current active rule of a "more prolonged chain". Therefore the "true chain" is always considered the one that's got the maximum amount of blocks. If one can find those blacks fairly quickly, then the attacker is able to re-write the history, perform another transaction and sell exactly the same coins. Based on that we can make an assumption that the chain of Lighting Networks is remains under threat of an "attack 51". That would mean that coins can be spend twice on one transaction which may ultimately bring harm to the network chain and also impose a threat on future on the Lightening Network. On that note, it can be said that its important to maintain values of the chain that were implemented at the start for a harmonic growth and development of the chain and the whole industry. Specifically, I mean to say - decentralise in a very broad meaning of this word.
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