One of the most interesting recent developments in the Bitcoin space is the Lightning Network. But before payments can be carried out; the payee has to issue an invoice. Although developers have been concerned about how this issue can be addressed, but there is a way to address it now, with the use of a circular route.
Basically, the concept is that your invoice and get yourself paid. This method of ‘circular routing’ operates with all current lightning node implementations. Since the invoice is self-generated, there is no need to wait for the payee to issue it.
Bitcoin News Today – Lightning Network
The fact it is a ‘hack’ makes it have certain risks and setbacks which are as follows:
- There will be increased fees and failure probability due to the longer route and small return payment.
- Since there is no way to identify the money as an expected payment, it appears to be like a usual fee to the payee.
- Both the receiver and sender must have well-connected nodes along with enough liquidity for the circular route.
The big problem is that of security. The route from A to B will probably go through other nodes, the same way the route back from B to A. if the intermediary node in both directions is controlled by the same actor, money can be stolen by rerouting and skipping B.
This is only an imperfect hack, but the Lightning Network is still an experiment. Another experiment carried out made us discover that Lightning payments are vital for the mass adoption of Bitcoin. Definitely, vending-machine-type micropayments are one killer app demanded by people in the consumer market.
For the past year, major institutional investment has been within the reach. Mass adoption will be sooner with a two-pronged approach, from both consumers and institutions.