As technology is getting more and more advanced with innovations being put to practical use, many people are trying to bring innovation to how payments are made and received throughout the world. The breakthrough made this innovation of launching cryptocurrency a viable option for transactions.
The cryptocurrency was a breakthrough technology that allowed transactions to occur directly without mediocrity. Before cryptocurrencies were invented, banks were our mediators through which we made transactions. But, with cryptocurrency, the transactions are direct and are accounted directly to the users’ accounts or wallets in this case.
The most commonly known cryptocurrency in the market is Bitcoin. This cryptocurrency became more known to the public when it reached its peak price of $19,783 in December 2017. Due to this massive rise, people's interest became more in the cryptocurrency game, and many people started investing in them.
But the price of Bitcoin is currently very high for normal consumers. The blockchain on which Bitcoin is based is only capable of processing up to 7 transactions per second which can be the reason for delays and could increase the fees.
The most potential solution to improve the system is the Lightning Network. This network provides an extra layer on top of the blockchain of Bitcoin to enable fast transactions so the fees can be reduced. This network was mainly designed to help reduce Bitcoin’s problem, but many others are also working to implement a solution similar to Lightning Network for their cryptocurrencies.
But first, let us know what Altcoins are, and then we will move further on how the Lightning Network scales with other Altcoins.
What exactly are Altcoins?
Altcoins are the substitutes for Bitcoin. These substitutes pose themselves better when compared to Bitcoin. These cryptocurrencies cover up Bitcoin's faults or limitations and provide users with a newer version. Some altcoins with lightning network support are:
- Litecoin
- ZCash
- Ethereum
- Monero
- Ripple
- NEO
- Stellar
Litecoin and Lightning Network
Litecoin is known as the direct rival of Bitcoin in the cryptocurrency space, and it is due to its minimal $0.40 transaction fees. Being the direct rival and the next best thing after Bitcoin, Lightning Labs implemented the Lightning Network on Bitcoin and Litecoin.
Another interesting thing is that Lightning Labs also had an initial cross-blockchain swap test between Bitcoin and Litecoin. This swap test was also known as the Atomic Swap test, which allows them to exchange tokens concerning their blockchains.
But one major problem Litecoin might have to face is that if Lightning Network is successfully implemented on Bitcoins’ blockchain, then the transaction fees of Litecoin are going to become a major disadvantage for them.
But, if we look at the positive side and things go well, then Litecoin has the opportunity to be adopted by many people. Only time will tell if Litecoin will flourish or fall.
ZCash and BOLT
ZCash is another cryptocurrency that aims to achieve enhanced privacy and anonymity. Their cryptocurrency is more private than Bitcoins’, as all small payments made through the two-way channels leave the records of the opening and closing channels accessed by both participating parties.
As ZCash is different in some ways from Bitcoin, it has to develop a different solution to provide a similar solution to Lightning Network. The answer to this is called BOLT, which Lightning Network highly inspires.
This solution has different ways to function than from Lightning Network. BOLT aims at making the transactions that are performed within the channel unlinkable. This method is done using two classic cryptography techniques: commitments and signatures. The former would hide the payment value, while the latter would allow the user to sign for the transactions without displaying what is being signed at the moment.
The researchers of BOLT claim that this network can work on other cryptocurrencies but with some cryptographic changes being implemented first. For example, this network would be able to work with Bitcoin but, as I said, with some changes being implemented first.
Ethereum and Raiden
Another major competitor in the cryptocurrency space is Ethereum. This cryptocurrency has been doing much better work in terms of transactions per second that it can process, i.e., 20 transactions per second compared to 7 transactions per second of Bitcoin. It is nearly three times more than Bitcoins’ which is astounding.
Ethereum is also in the race to develop a network similar to the Lightning Network to provide nearly safe and free transactions. The development of a separate network is because Ethereum requires a network specifically made to use with them and foster their needs. Their solution is called Raiden, which works pretty similarly to Lightning Network.
The concept of Raiden is simple – providing an extra layer of security outside the blockchain to have safe and free transactions for two-way channels. But the difference between Lightning Network and Raiden is ERC20 compatible, i.e., every token issued on this specific cryptocurrency will work with Raiden.
In September 2017, Raiden was launched on the testnet of Ethereum, which raised nearly around $50 million. This money would be used for further development. In December 2017, another network was developed with a lighter version called microRaiden, which does the same thing as Raiden, except working with only one-way transactions. These can be used for payments of small amounts like buying groceries or lunch.
Monero and Lightning Network
Being another privacy-focused cryptocurrency, Monero is another cryptocurrency on which Lightning Network is being implemented. At first, the network would not fully work with the currency, but with plans of adding another layer to the network, Lightning seems to be a viable option.
In September 2017, a multi-signature wallet was added to Monero’s infrastructure, allowing multiple parties to sign the transaction to be fully completed. This new edition is currently being implemented along with many other features on the Lightning Network along with key improvements to retain privacy as much as possible.
The project's creator is also in talks with Litecoin to incorporate Lightning Network with Monero and make atomic swaps between the blockchains possible.
Ripple and Lightning Network
Ripple is one such currency that is made to handle numerous transactions as its website projects that it can consistently handle 1,500 transactions per second which are mind-boggling compared to Bitcoin.
Ripple was not interested in going Lightning’s way. So in August 2017, Ripple and Bitfury, a fully servicing blockchain tech company, released a code that integrated Lightning Network into the Interledger. Here, Interledger is Ripple’s atomic swap technology, i.e., it is a protocol that enables transactions between different blockchains.
Ripple only wanted Lightning’s scalability as they have their atomic swap technology already developed by Interledger. This tech would enable one to make a transaction in public and private blockchains, along with traditional payment systems like PayPal.
NEO and Trinity
NEO is another cryptocurrency in the race to become the most valuable. This currency is eerily similar to Ethereum, where the users can operate decentralized applications. As Ethereum developed its scaling solution, NEO also needed to develop and name the Trinity.
Trinity is still developing, and there’s no way of knowing when it will be released. Either way, it is better for NEO as it is another currency that handles 1,000 transactions per second, which is quite a lot compared to other currencies.
Raiden, Lightning, and Trinity are very similar in terms of their aim, but the underlying tech that these 3 have is very different when compared.
Stellar and Lightning Network
Another one of those currencies which handles 1,000 transactions per second is Stellar. Being able to make numerous transactions, with the addition of Lightning Network into the mix, this currency would be way faster.
When Lightning Labs unveiled their Lightning Network beta, Stellar announced that they would be integrating it and making their currency much better.
However, currently Stellar does not need Lightning Network. Still, if it perfectly integrates with the system of Stellar, then it would require no time to become one of the most valuable cryptocurrencies.
Conclusion
Lightning Network is made to bring betterment into the tech of various Altcoins. Some of them are trying to integrate the Lightning Network into their blockchain, while other blockchains have some restriction that restricts them from integrating Lightning Network. So, they head on to develop a similar solution but also cover the loopholes or missing targets that Lighting Network has not yet developed into its system.
