That was quick — within hours of Bitcoin miners “locking in” BIP91 SegWit support, developer ACINQ released a Lightning Network-ready Android app called Eclair Wallet.
Since SegWit has not actually activated on the Bitcoin network yet, Eclair Wallet runs only only the Bitcoin Testnet. Once it’s functional on the main Bitcoin blockchain, users will be able to perform both on-chain and LN transactions.
Lightning Network (LN) is a second-layer payment channels network that interfaces with the main blockchain. It’s designed to allow much greater transaction volumes, at faster speeds and lower fees. LN is only possible on Bitcoin if its “transaction malleability” issue is addressed — something SegWit promises to do.
Sidechain development company Blockstream sent the first Lightning Network transactions on Litecoin just hours after that network implemented SegWit in May 2017. Bitcoiners can expect a flurry of similar development activity if SegWit activates — something that now looks increasingly likely.
ACINQ a Lightning Network Pioneer
ACINQ was always an early starter on Lightning development. In March, the team said the alpha version of its Eclair implementation was the first to achieve compliance with Lightning Network specifications. In 2016, the company also played a role in defining these standards.
In a blog post, ACINQ said all Eclair Wallet’s on-chain transactions are SegWit, but LN functionality is opt-in. On-chain transactions are fully compatible with non-SegWit ones.
To access the Lightning Network, users must open “channels” with others. Channels are basically a record of IOUs that reconcile with the main blockchain from time to time.
Because of this, LN wallets generally need to check the main blockchain regularly to ensure each channel’s state is correct. However, ACINQ says this isn’t as necessary if the channel is only used to make payments — meaning Eclair users can leave the app closed for longer periods of time.
Testing the Eclair Wallet
To receive the coins in Eclair Wallet, swipe right on the white transaction area to display an address and QR code. Swipe right again to add a Lightning Network payment channel. Scanning a QR on the “Starblocks” store confirms it’s a Lightning transaction and records the item purchased.
Creating a LN channel, funding it and paying isn’t exactly intuitive to a newcomer, but experienced bitcoin users should be able to figure it out with some fumbling around. Hopefully the developers will improve the UI in updates.
Lightning Network Benefits and Criticisms
Some claim Lightning Network will open up thousands of new use-cases for Bitcoin, offering millions of transactions per second with low fees and no minimum, allowing more micropayments.
Conversely, some say this will reduce transaction fee revenue for miners. Critics also claim these non-blockchain payment layers open the potential to enforce KYC rules on bitcoin transactions, and thus greater surveillance of bitcoin users.
To get a better (yet still technical) idea how Lightning Network works, check out this video tutorial:
Are you excited by the prospect of Lightning Network payments for Bitcoin? Let’s hear your thoughts.
Images via Flickr user jeffreyw, ACINQ