Peer-to-Peer Crypto Exchange Hodl Hodl Enables Lightning Network Transfers
The management at Hodl Hodl, a globally accessible peer-to-peer (P2P) cryptocurrency exchange, has announced the launch of Lightning Network (LN) protocol-enabled digital currency trades.
As noted in an official Medium blog post published by Hodl Hodl (on June 5, 2019), the decentralized exchange’s (DEX) users will be able to purchase bitcoins (BTC) and receive direct transfers to their LN-enabled wallet.
Successfully Completed Testing Of Lightning Network-based Trading
The developers at Hodl Hodl confirmed they had recently announced “public testing” of Lightning Network-based trading at testnet.hodlhodl.com. Hodl Hodl’s development team also revealed that the tests had been completed successfully.
As explained in Hodl Hodl’s blog, the Lightning Network contracts are “created between buyer and seller.” The contracts require that the seller deposit bitcoins from their LN-powered wallet. Meanwhile, the buyer pays the seller “according to the agreed upon” terms and conditions, including the payment method specified by the seller (and agreed to by the buyer).
Hodl Hodl’s Exchange Holds Funds During “Contract Lifetime” For LN-based Orders
After the buyer has made the payment, the seller’s contract “releases bitcoins directly” to the buyer’s LN-enabled crypto wallet. According to the Hodl Hodl team, the only difference in this type of trade agreement is that for the “contract lifetime”, the funds are held by the exchange operator’s Lightning wallet.
The ensures that both the buyer and seller are protected from potentially fraudulent activity, the Hodl Hodl team explained.
By managing the funds being transferred from buyer to seller, Hodl Hodl’s platform is able to offer “cheaper, faster, and simpler” LN-powered contracts, the exchange’s blog noted.
Clarifying how the transfers will be processed, the Hodl Hodl team mentioned that the Lightning Network contracts will not impact the regular on-chain, multi-sig bitcoin contracts issued on the P2P cryptoasset exchange.
Normal, On-Chain BTC Transfers To Remain Non-Custodial
The Hodl Hodl team explained that the normal on-chain BTC transfers will be “fully non-custodial” as the exchange will not have access to users’ funds at any point during the contract’s lifetime.
In order to purchase bitcoins, users will have to sign into their hodlhodl.com accounts and then change the exchange mode to Lightning. As explained in Hodl Hodl’s blog, the different exchange modes have been created for users’ convenience. As mentioned, there’s a Lightning mode and also an on-chain mode for regular BTC transfers.
Blue Theme For Standard Mode, Purple Theme For LN Mode
When trading on Hodl Hodl’s base network, users are not required to do anything different. They will also be able to see (through the user interface) that they’re in “on-chain” mode as it’s a default setting. While in the on-chain mode, the website will have a blue theme, with Hodl Hodl’s standard logo.
To switch to Lightning Network-enabled mode, users can press the Lightning button located in the header of Hodl Hodl’s website dashboard. When Lightning mode is selected, the site has a purple theme and a lightning icon appears on top of Hodl Hodl’s company logo.
After selecting an exchange mode, users can create new buy or sell offers and contracts, view the exchange’s current offer list, and also see “where [their] trade will occur” (on-chain or on the Lightning network).
First Release Of LN-Powered Trading Software May Contain Minor Bugs
The Hodl Hodl team has mentioned that this is their first release of LN-enabled trades on the exchange’s mainnet.
They also acknowledged that there might be “a possibility of minor”, non-critical bugs in the software, however the basic functionality of the new feature should work properly.
Hodl Hodl’s developers are currently working on an improved version of the current LN-enabled crypto trading solution. The exchange operator is planning to release an update in the “next few weeks” which will mostly be related to making improvements to the user interface (UI).
Lightning trades available on Hodl Hodl's MAINNEThttps://t.co/HVqmcKo14Q
— Hodl Hodl (@hodlhodl) June 5, 2019