Lightning Labs Releases Non-Custodial Service “Loop” to make Receiving Bitcoin Easier
Lightning Labs has announced the launch of a new feature called Lightning Loop that aims to address the issues surrounding the channel capacity limits. Through Loop, the purpose is to improve the efficiency, scalability, and usability of Lightning.
One of the major contributors of Lightning Network, Lightning Labs has announced the alpha launch of the solution that will be coming onto the second layer, on top of the Bitcoin network. Before this new feature, once a user’s channel reached the maximum capacity, it could further accept no payments.
“The ability to receive is key,” as stated by Alex Bosworth and Bryan Vu in the official blog post, and in order to cater to the masses, it is essential these kinds of obstructions have to be removed.
Announcing the alpha release of Lightning Loop, a non-custodial service that makes it easier to receive #bitcoin on Lightning.
With Loop, users can get inbound capacity and withdraw from Lightning while keeping channels open. 🔁
Read more and try it out: https://t.co/KoAXDm9JFl
— Lightning Labs⚡️ (@lightning) March 20, 2019
An Easier Way to Receive on Lightning
This alpha release focuses on Loop Out which allows the users to increase their receiving capacity by offloading their Bitcoin on the Lightning Channel and back on the main channel while keeping the channels open, basically, users won’t have to close and reopen the new payment channels.
A user has to pay the same fees in order to open a payment channel and further wait just as much as sending a regular bitcoin transaction on the blockchain. Usually, these channels are set up by those users that have a fixed capacity.
But with Lightning Loop, according to Wu and Bosworth a user would be able to receive more funds by emptying the channel. The network in result would become more stable, efficient, and cheaper to use.
In essence, it moves funds out a payment channel and into cold storage, Bitcoin wallet or even fiat currency through an exchange.
Solving the Biggest Pain Point
The transactions on Loop Out has a maximum limit of 0.01 BTC that is 1 million sats at its initial phase. Though no usage fees will be charged during this phase, on-chain fees will still apply.
According to Conio Marco Pesani, the director of Bitcoin wallet, this solves one of the biggest pain points of the lightning network that is “channels liquidity management.” He further said this is a massive advancement.
"Loop" from @lightning solves one of the biggest #LightningNetwork pain points: channels liquidity management. I started to work on $BTC in 2016 so I'm quite new, but I've never seen so many advancements and such focus on the final objective. Massive.https://t.co/zXxPLZB6Mb
— Marco Pesani (@marcopesani) March 20, 2019
The team is further working on Loop In that will allow refill (addition of additional funds) of payment channels with “on-chain bitcoin from wallets or exchanges.”
More details on this can be found here: https://github.com/lightninglabs/loop
This has been a great year for lightning Network as its capacity constantly broke new records, generated buzz all over the world through Lightning Torch and received the attention of Twitter CEO Jack Dorsey and now another feature has been added to make the network more scalable and cheaper.