The release of “Loop” feature has been announced by Lightning Labs. The dev team promises that the new feature will make the Bitcoin Lighting Network usability easy. This will go a long way in ensuring the Bitcoin payment channel scalability is achieved.
Lighting Labs @lighting
“Announcing the alpha release of Lightning Loop, a non-custodial service that makes it easier to receive #bitcoin on Lightning.
With Loop, users can get inbound capacity and withdraw from Lightning while keeping channels open.
Read more and try it out: https://blog.lightning.engineering/posts/2019/03/20/loop.html …”
9:04 am – 20 Mar 2019
With the new feature, Bitcoin users will no longer have to close and open new payment channels when receiving BTC. Opening new channels means an additional transaction fee and extended waiting time. However, with the new feature, transactions are set to be instantaneous.
How Does the Loop Work?
To shed light on how lighting channels works, Alex Bosworth and Bryan Vu; Lighting Labs developers added in a blog post:
“Lighting channels are like tubes of money … Money moves around in the tube, but the total amount of funds remains constant. So, unlike other payment systems, Lightning requires ‘inbound capacity’ in order to receive funds.”
Simply put, Lighting Loop helps in withdrawing inbound capacity to enable users to use the same channels to receive incoming BTC. Simply put, the Lighting Loop “moves funds out of a payment channel and “into a bitcoin wallet, cold storage, or fiat currency via an exchange; thus the emptying of the channel allows [a lighting user] to receive more payments.”
“This initial release focuses on the ability for people to receive with what we call Loop Out. Lightning Loop Out allows users to increase their receiving capacity by offloading their funds from the network while keeping channels open.”
According to the two developers, this is the ‘Loop Out’ Feature which precedes the ‘Loop In’ feature that will be able to automatically refill with “on-chain bitcoin from wallets or exchanges.”
Why the Lightning Loop Option?
The looping upgrade with usher in a new era in the blockchain industry. According to Alex and Bryant:
“We believe Loop will contribute to the efficiency, scalability, and usability of Lightning. We encourage any Lightning developers, testers, and enthusiasts to begin trying Loop today.”
The Alpha Loop release has seen a lot of positivity which is a big boost for Lightning Labs. Marco Pesani, the director of Bitcoin wallet, Conio in his tweet says:
“Loop from [Lightning Labs] solves one of the biggest lightning network pain points: channels liquidity management … I’ve never seen many advancements and such focus on the final objective. Massive.”