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Incentivizing Lightning Network Users

August 15, 2018

 

Perhaps the Lightning Network is not as far-fetched a solution as its critics seem to think. A report by Coindesk, which was released yesterday, brought to light a little known incentive related to running a Lightning node that some Blockchain enthusiasts might not be aware of as of yet.

 

Before we get into exactly what this is, let’s review for clarity’s sake, precisely what the Lightning Network is. At a foundational level, it is a protocol that is made to work with a Blockchain and whatever existing protocol it runs on, to speed up and optimize Cryptocurrency payments.

 

Keep in mind that by protocol, we basically mean an algorithm, which is also a set of rules that tell a network how to operate. A common example of this in the Blockchain world is a Proof of Work protocol, which tells a blockchain network how to record and validate transactions.

 

Over the course of the last year, the Lightning Network has been coming under fire due to critics who have been saying that payments on it fail more often than they succeed, as well as that it is not the scaling solution that it is cracked up to be.

 

While it is true that the Lightning Network is in its early stages, it has already reportedly consistently achieved fees that are as low as about 1 cent in US dollars. As compared to the current state of Bitcoin fees, which clock in somewhere between 6 cents and 22 cents, this is definitely an improvement.

 

As far as the incentive mentioned above, Coindesk’s article stated that Lightning node operators, which are the users that help to keep the network running as it should, can earn a small income from their participation in the network.

 

The issue now is this “income” is not quite what it seems to be upon first glance. In the case of Coindesk’s article, their title is aptly chosen as it includes the caveat “a little,” in connection with “you can get paid to use the Lightning Network.”

 

Despite this, it is a good sign for the future of the Lightning Network, especially if, again as Coindesk suggests, these potential monthly profits can rise over time. If they do, then people will see all the more reason to participate in the network’s growth, including its movement to support other blockchains, beyond Bitcoin’s as well as several of the other most powerful Crypto projects.

 

In connection with this growth, it should also be noted that all of this will depend on the Lightning Network’s ability to fulfill its overarching vision of being the fastest payment protocol in the world.

 

 

By: BGN Editorial Staff

 

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