Lightning Labs will be issuing a new feature whose objective is to enhance the usability of the lightning network which is a bitcoin payment channel technology that aims at leveling the cryptocurrency.
The new feature announced by Lightning Labs named as ‘Lightning Loop’ will enable the users to send and receive Bitcoin in more volume and there is no need to close and reopen new payment channels. The process of creating a channel over the lightning network is much same as that of sending regular transaction on the Bitcoin network. In order to open a payment channel, the users are required to deposit the same fee and wait for the same period of time as sending a normal bitcoin transaction needs. Once the payment channel gets created, a user will be permitted to send the bitcoin payments immediately and at very low cost.
The payment channels are established by users within a fixed size. Lightning channels could be seen as a digital pipe for Bitcoin. The more you will be able to pipe through the channel by sending, the more you will be able to receive.
Developers of Lightning Labs Alex Bosworth and Bryan Wu explained in a blog post-
“Lighting 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.”
With the help of Lightning Loop, the inbound capacity can be removed so that it will allow a user to use the same payment channel in order to receive bitcoin. The funds will be moved outside of the payment channel with the help of lightning loop into a bitcoin wallet, or fiat currency or cold storage through an exchange. By unloading the channel, users can receive more payments, meanwhile, enables them to continue with transactions and loop out again. Due to these new users need, one doesn’t need to wait for others to create channels with them on the network.
Developers of Lightning Loop highlighted that in their next release they are planning to execute the Loop In feature. This feature will allow users to fill their lightning channels again with the help of on-chain Bitcoin mainly from wallets or exchanges. Since the user, by using the lightning network creates a set of transactions; their channel balance will be reduced. The users can then make use of Loop In feature to refill the funds on lightning through a bitcoin wallet or an exchange account and can continue to add more funds as needed.
The Lightning labs are gaining positive comments over the project from users. The objective of the Lightning Loop is to enable users to move funds securely in and out of the Lightning network by using non-custodial Bitcoin contracts. Lightning channels make the network more efficient, more convenient and less expensive to use.