Andreas Antonopoulos, a very well-informed Bitcoin OG and longtime proponent of Bitcoin (BTC) and digital currencies, recently discussed Bitcoin’s 2nd-layer scaling solution – the lightning network – on the latest session of his podcast, Let’s Talk Bitcoin.
During this latest session, Antonopoulos spoke about what he considers to be the lightning network’s most powerful and underappreciated feature – splicing.
Andreas Antonopoulos on Bitcoin’s Lightning Network and Splicing
Per the podcast, Antonopoulos said that once the lightning network is widely adopted, users will keep a substantial volume of their funds in the lightning network at all times. Funds they do not keep there will be held in cold storage wallets.
The feature that allows users to move their funds on-chain and off-chain is referred to as splicing, which Antonopoulos believes is the underlying strength of the lightning network. Explaining the basic premise of splicing, he said:
“What splicing allows you to do is blend the open channel, close channel and on-chain Bitcoin outputs into a single transaction.”
Explaining further, he said that splicing is the feature that encompasses the completion of all operations including the opening, closing, and rebalancing of funds on the on-chain wallet.
The sending of Bitcoin in a lightning channel, the withdrawing of Bitcoin to the main blockchain, and the opening and closing of a lightning channel can all be completed simultaneously in a single transaction. Therefore, splicing will prevent the Bitcoin blockchain from getting bogged down with a ton of different transactions.
After explaining this, Antonopoulos was asked if this was a way to piggyback on existing traffic, as users will be making transactions periodically.
To answer the interviewer’s question, he said:
“Bingo. What that means is that your wallet does all of this automatically. It decides, depending on who you want to pay and whether they can be reached on-chain or off-chain to construct your transaction and piggyback as many open and closed channels as it needs to do.”
Andreas Antonopoulos on Transaction Fees in the Bitcoin Lightning Network
In addition to speaking about the highly innovative and underappreciated splicing feature, Antonopoulos spoke about a function called CoinJoin, which is used for obfuscation and privacy in the lightning network.
However, what’s not generally known about this function is that it saves substantially on transaction fees. Explaining how it works in addition to obfuscation and privacy, he said:
“It also saves on transaction fees. Because if you’re going to do that transaction anyway and you get five other strangers to join you and do their transactions, you pay one transaction fee across all of you. One transaction with five times the outputs is a lot cheaper than five transactions.”
All in all, Antonopoulos appears to be very excited about how advanced and sophisticated the Bitcoin lightning network really is.
Hopefully, its development continues at an exuberant rate and the lightning network becomes widely adopted soon. If it’s not ready before the next bull run, Bitcoin will run into some serious problems with extremely high transaction fees and slow transaction times.
What do you think is the most exciting aspect of Bitcoin’s Lightning Network? Do you think it will achieve mass adoption in time to solve Bitcoin’s aforementioned problems? Let us know in the comments section below!