As technology is getting more and more advanced with new innovations being put to practical use, many people are trying to bring innovation on how the payments are made and received throughout the world. This innovation was made by the breakthrough of launching cryptocurrency as a viable option for transactions.
Cryptocurrency was a breakthrough technology that would allow the transactions to occur directly without any mediatory. Before cryptocurrencies were invented, banks were our mediators through which we made transactions. But, with cryptocurrency, the transactions are direct and are accounted directly to the users’ accounts or wallets in this case.
The most commonly known cryptocurrency in the market is Bitcoin. This cryptocurrency became more known to the public when it reached its peak price of $19,783 in December of 2017. Due to this massive rise, the interest of people became more into the cryptocurrency game and many people started investing in them.
But as the price of Bitcoin is currently very high for normal consumers to purchase and the blockchain on which Bitcoin is based is only capable of processing up to 7 transactions per second which can be the reason for delays and could increase the fees.
To improve the system, the most potential solution seems to be the Lightning Network. This network provides an extra layer on top of the blockchain of Bitcoin to enable fast transactions so the amount of the fees could be reduced. This network was mainly designed to help reduce Bitcoin’s problem, but many others are also working to implement a solution similar to Lightning Network on their own cryptocurrencies.
But first, let us know what Altcoins are, and then we would move further on how the Lightning Network scales with other Altcoins.
What exactly are Altcoins?
Basically, Altcoins are the substitutes to Bitcoin. These substitutes pose themselves better when compared to Bitcoin. These cryptocurrencies cover up the faults or limitations that Bitcoin has and provide users with a newer version. Some altcoins with lightning network support are:
Litecoin and Lightning Network
Litecoin is known as the direct rival of Bitcoin in the cryptocurrency space and it is due its minimal $0.40 transaction fees. Being the direct rival and the next best thing after Bitcoin, Lightning Labs implemented the Lightning Network on both Bitcoin and Litecoin.
Another interesting thing is that Lightning Labs also had an initial cross-blockchain swap test between Bitcoin and Litecoin. This swap test was also known as Atomic Swap test which allows them to exchange tokens with respect to their blockchains.
But one major problem the Litecoin might have to face is that if Lightning Network is successfully implemented on Bitcoins’ blockchain, then the transaction fees of Litecoin is going to become a major disadvantage for them.
But, if we look at a positive side and things do go well, then Litecoin has the opportunity to be adopted by a large number of people. Only time will tell if Litecoin would flourish or fall.
ZCash and BOLT
ZCash is another cryptocurrency that aims to achieve enhanced privacy and anonymity. Their cryptocurrency is more private than Bitcoins’, as all small payments made through the two-way channels leave the records of opening and closing of channels that are accessed by both participating parties.
As ZCash is different in some ways than Bitcoin, it has to develop a different solution in order to provide a solution that is similar to Lightning Network. The answer to this is called BOLT which is highly inspired by Lightning Network.
This solution has different ways to function than from Lightning Network. BOLT aims at making the transactions that are performed within the channel unlinkable. This method is done by using the two classic cryptography techniques which are commitments and signatures. The former would hide the value of payment while the latter would allow the user to sign for the transactions without displaying what is being signed at the moment.
The researchers of BOLT claim that this network can work on other cryptocurrencies but with some cryptographic changes being implemented first. For example, this network would be able to work with Bitcoin but, as I said, with some changes being implemented first.
Ethereum and Raiden
Another major competitor in the cryptocurrency space is Ethereum. This cryptocurrency has been doing much better work in terms of transaction per second that it is able to process, i.e., 20 transactions per second as compared to 7 transactions per second of Bitcoin. It is nearly 3 times more than the Bitcoins’ which is astounding.
Ethereum is also in the race of developing a network similar to the Lightning Network so that it provides nearly safe and free transactions. The development of a separate network is due to the fact that Ethereum requires a network that is specifically made to use with them and foster their needs. The name of their solution is called Raiden which works pretty similarly to Lightning Network.
The concept of Raiden is simple – providing an extra layer of security outside the blockchain to have safe and free transactions for two-way channels. But the difference between Lightning Network and Raiden is the latter is ERC20 compatible i.e. every token that is issued on this specific cryptocurrency will work with Raiden.
In September 2017, Raiden was launched on the testnet of Ethereum which raised nearly around $50 million. This money would be used for further development. In December 2017, another network was developed with a lighter version was called microRaiden which does exactly the same thing as Raiden with the exception of being working with only one-way transactions. These can be used for payments of small amounts like buying groceries or buying lunch.
Monero and Lightning Network
Being another privacy-focused cryptocurrency, Monero is another cryptocurrency on which Lightning Network is being implemented. At first, the network would not fully work with the currency but with plans of adding another layer to the network, Lightning seems to be a viable option.
In September 2017, a multi-signature wallet was added to Monero’s infrastructure that would allow multiple parties to sign the transaction in order to be fully completed. This new edition is currently being implemented along with many other features on the Lightning Network along with key improvements so that privacy is retained as much as possible.
The creator of the project is also in talks with Litecoin in order to incorporate Lightning Network with Monero and also make atomic swaps between the blockchains possible.
Ripple and Lightning Network
Ripple is one such currency that is made to handle numerous transactions as their website projects that it can consistently handle 1,500 transactions per second which are mind-boggling when compared to Bitcoin.
Ripple evidently was not interested to go Lightning’s way. So in August 2017, Ripple along with Bitfury, a fully servicing blockchain tech company, released a code that integrated Lightning Network into the Interledger. Here, Interledger is Ripple’s atomic swap technology, i.e. it is a protocol that enables transactions between different blockchains.
Ripple only wanted Lightning’s scalability as they have their own atomic swap technology that is already developed by Interledger. This tech would enable to make a transaction in public and private blockchains as well, along with traditional payment systems like PayPal.
NEO and Trinity
NEO is another cryptocurrency that is in the race to become the most valuable. This currency is eerily similar to Ethereum where the users can operate decentralized applications. As Ethereum developed its own scaling solution, NEO also needs to develop and it named them Trinity.
Currently, Trinity is still in development and there’s no way of knowing when it will be released. Either way, it is better for NEO as it is also another currency that handles 1,000 transactions per second which is quite a lot when compared to other currencies.
Raiden, Lightning, and Trinity are very similar in terms of their aim, but the underlying tech that these 3 have is very different when compared.
Stellar and Lightning Network
Another one of those currencies which handles 1,000 transactions per second is Stellar. Being able to make numerous transactions, with the addition of Lightning Network into the mix, this currency would be way, way faster.
When Lightning Labs unveiled their beta of Lightning Network, Stellar also announced that they will be integrating it and make their currency much better.
However, currently Stellar does not need Lightning Network, but if it perfectly integrates with the system of Stellar, then it would require no time to become one of the most valuable cryptocurrencies.
Lightning Network is made to bring betterment into the tech of various Altcoins. Some of them are trying to integrate the Lightning Network into their blockchain while other blockchains have some of the restriction that restricts them to integrate Lightning Network. So, they head on to develop a similar solution but also covering the loopholes or missing targets that Lighting Network has not yet developed into its system.