Lightning Network New Development: Eltoo – Lighter Off-Chain Transactions


One of the most important scaling solutions for Bitcoin, Lightning Network, may be ready to be launched. But developers keep working on it and have came up with a new feature that would significantly reduce the amount of data that is required to be stored. This development is known as Eltoo.

Eltoo – The New Lightning Network Improvement

Lightning Network is the so awaited scaling solution for Bitcoin that would allow it to process an important number of transactions without congesting the network. But there are some limitations in the LN. One of these is the fact that users need to store an important amount of data, which is sometimes difficult to download and run.

But some lightning developers, including Lightning Labs co-founder ‘Laolu’ Osuntokun and other important figures like Christian Decker and Rusty Russell, have been working in a new proposal called Eltoo. This new update would provide an alternative way to perform off-chain transaction without having to deal with these large amounts of data.

It is also important to mention that with so much data, users can accidentally broadcast older information to the network, and it can cause them to lose their money. With Eltoo, it is possible to store just the most recent off-chain transaction data.

“With Eltoo, we reduce the risk of funds being swept away. We remove this toxic information,” commented Decker. “I had an old lightning node on my laptop. I restored it. I didn’t know I didn’t have the newest state. The guy closed the connection because they knew it was an old state! Because he could steal it. Which he did, by the way.”

Decker has also commented on why the name ‘Eltoo’ and not another one. The truth is that Eltoo is just a phonetic spelling of L2 which means layer-two and it is referred to the Bitcoin Lightning Network.

Eltoo does not want to replace the entirety of the Lightning stack, but instead it is a replacement for the original update mechanisms that maintains backward compatibility with the remaining parts of the stack.

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