Lightning Labs has unveiled a new feature intended at enhancing the usability of the lightning network, a bitcoin payment channel intended for scaling the cryptocurrency.
Dubbed “Lightning Loop,” users will now be allowed to receive bitcoin in rising quantities without needing to close or reopen new payment channels.
Users are required to pay the same fees when opening a payment channel and wait the same time as if sending a normal bitcoin transaction to the blockchain. However, a user can send bitcoin payments immediately and at a fraction of the cost.
Usually, users with a fixed capacity set up these payment channels.
As Bryan Wu and Alex Bosworth, developers at Lightning Labs, underscored in a blog post:
“Lightning channels are like tubes of money … Money moves around in the tube, but the total amount of funds remains constant. So, unlike other payment systems, Lightning requires ‘inbound capacity’ in order to receive funds.”
This inbound capacity can be withdrawn with the new Lightning Loop, allowing users to keep using the same payment channel to receive bitcoin.
Wu and Bosworth elucidated in their post that essentially, the Lightning Loop transfers the funds from a payment channel “into a bitcoin wallet, cold storage, or fiat currency via an exchange.”
“This emptying of the channel allows [a lightning user] to receive more payments,” they added.
According to Wu and Bosworth, the “Loop Out” feature, as they call it, will be having an opposite “Loop In” feature, which they are presently working on, to allow payment channel refills with “on-chain bitcoin from wallets or exchanges.”
“We believe Loop will contribute to the efficiency, scalability, and usability of Lightning. We encourage any Lightning developers, testers, and enthusiasts to begin trying Loop today,” they said.
Lightning Labs has been getting a positive response from users since the alpha release of the tool. Marco Pesani, product development director of bitcoin wallet Conio, said in a tweet:
“Loop from [Lightning Labs] solves one of the biggest lightning network pain points: channels liquidity management … I’ve never seen so many advancement and such focus on the final objective. Massive.”