Thunder Network is the first ever implementation of Lightning Network, the payments technology built over Bitcoin blockchain. The alpha version of the Thunder Network was announced today by Blockchain.
According to the company’s announcement on their blog, the Thunder Network is currently available for developers and enthusiasts to test and build upon. However, as a sign of caution Blockchain clarifies that being an alpha product, it is advisable to use it for transactions only within a trusted friends circle.
Lightning Network was proposed earlier this year as a scalability solution for the Bitcoin blockchain which registered lots of transaction backlogs due to the block size issue. The current block size is still at 1 MB which is not sufficient enough to support the growing bitcoin transactions, hence causing backlogs in confirmations. This has resulted in an increase in the average miner fee in order to incentivize the miners to confirm the transactions on a priority basis.
The increase in miner fees has affected bitcoin micro transactions, which was once the main differentiating factor of Bitcoin over other electronic transfers. The Lightning Network creates a payment channel over the blockchain and parties can make it unlimited transactions over the open channel connecting them without waiting for the Bitcoin blockchain to confirm each transaction. The transaction history will be recorded on the blockchain periodically after the channel between the parties is terminated. This mechanism not only increases the number of transactions that can be processed by the blockchain, but also drastically reduces the transaction fee associated with the fund transfers over the network.
Blockchain has reported that the Thunder Network outperformed Visa in terms of the number of transactions handled per second. While Visa’s stands somewhere around 100000 transactions per second, Thunder Network is said to have exceeded it. In addition to faster transactions, the payments over Thunder Network is also said to be secure and private, with each transaction on the network processed through multiple nodes. The transactions are also AES-CTR encrypted with authentication.
The Thunder Network or Lightning Network will not be integrated with the main Bitcoin blockchain until the CSV and SegWit protocols are included into the Bitcoin protocol. So, people .at have to wait for a while to enjoy the power of Thunder Network for normal transactions.