Ever heard of the term “ Bitcoin Dust ”? That’s the case when the transactions are too little in monetary value that it is just not profitable for the network to support such transactions, hence a transaction fee is usually levied. That’s one issue which needs to be addressed and how it can be done is a matter of choice.
Let’s say you read something great on the Internet over the weekend and thought it might be a good idea to tip the author with 10 cents, for what it’s worth. Your part is done once you that sent your precious 10 cents. The third party whose business relies on you sending money to someone steps in now. The third-party tells you that their transaction processing fee is a flat rate of 15 cents. Now the author, who you wanted to tip 10 cents would end up owing you or the third party 5 cents! Otherwise, you would end up spending 25 cents. That is the closest I can get to explaining the problems of using bitcoin for micro-payments.
Micro-payment problem is what we are sticking to in this article about the Lighting Network. Although Lighting Network has other tricks up its sleeves, the current issue in discussion is what catches my attention the most.
Bitcoin and Micro-payments
Micro-payments have been touted as a great use case for a decentralized cryptocurrency, the flagship being the Bitcoin. But anyone who has made bitcoin transactions knows that it takes time. Not as much as it would if a bank were to process your FIAT money. Bitcoin transactions are almost instantaneous when we compare it with the financial system that has existed for a few centuries now, but the time taken to clear each transaction is gradually increasing as the number of bitcoin users […]
