Bitcoin's scaling protocol, Lightning Network (LN), is known for its speed, quickness, and economy when it comes to processing small Bitcoin transactions. Now, with a new feature, LN will be able to not only handle small transactions, but also transactions of up to 10 BTC within the network.
The developers of Lightning Network (LN), a second layer protocol designed to improve network scalability Bitcoin, they announced to Wumbo, a new version of the protocol that begins its development with the so-called lnd 0.11-betaThis new version for LN integrates a function known as Wumbo Channels, which breaks the network’s 0,1677 BTC limit when creating transaction channels. In this way, Wumbo will be able to process large transactions of up to 10 BTC, a feature that will undoubtedly benefit many in the crypto community.
During the announcement, Bryan Vu, noted that after 2 years of work, they are confident of removing the limitations that exist in the size of Lightning Network channels, and allowing larger channels for those who so wish. Vu noted that the 0,1677 BTC limit on the network channels served the function of protecting and safeguarding users' funds, but that thanks to software developments, they can eliminate this protection without affecting the security of the funds and the network. Although he also calls for caution and awareness of the risks that exist when operating devices connected to the Internet.
“After two years of hard work and extensive community testing, we’ve reached a point where we feel comfortable removing these limitations for those who want larger channels.”
Vu also notes that advanced Lightning Network users, including enterprises and node operators, may choose to create and use larger transaction channels than usual.
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Wumbo, opening new possibilities in LN
Lightning Network is a protocol known for its instant payments and fairly low commission fees, which allows for small payments to be made with Bitcoin. While this protocol has many advantages, the limitation of the amount of BTC in a channel of only 0,1677 BTC is somewhat annoying for many users. This amount is the maximum that could be moved on LN, and users who needed to make transactions for a larger amount had to open new channels, and therefore, pay higher commissions. Therefore, the implementation of Wumbo is an innovation in the network, which now allows users to have the option of transferring up to 10 BTC in a single channel, thus saving on routing fees.
Now, the possibility of creating larger channels on LN became a reality this week, with the opening of a new 5 BTC channel by payment provider OpenNode and LOOP, a node on the network that allows for submarine swaps between Bitcoin and LN. Opening larger channels allows users to receive larger payments, and save significantly more on transaction fees previously paid to peers to open or close channels. Users who need more liquidity can open a single channel on LN to route transactions of up to 10 BTC from one node to another.
Overall, users will pay less commission fees to be able to make and receive their payments and transactions, and will be able to enjoy a more balanced network thanks to this new implementation. Although LN expert and CTO at GraafOne, Francisco Calderon, he said during a interview that this function will benefit the most exchanges and cryptocurrency exchanges, which are not limited to the users themselves.
Greater benefits for exchanges
Calderon's assessments indicate that exchanges such as Binance and Bitmex will benefit the most from this feature, as they will be able to use their own nodes to route their own payments and make transfers between them without paying fees. However, for individual users who wish to make payments of more than 1 BTC, it would be a better option to continue using the Bitcoin blockchain directly, as these users do need a node to route payments and therefore must pay fees.
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