Lightning Network is a bitcoin layer 2 solution that enables faster and cheaper transactions than mainchain transactions. Lightning scales Bitcoin without sacrificing decentralization, unlike scaling solutions such as increasing block sizes that lead to centralization. To make payments on LN, it is crucial to understand the notion of invoice and the developments in progress.
Specifications on Lightning
Most payments on Lightning Network are based on the principle of invoices: the recipient creates an invoice to request payment from a payer. An invoice contains information that identifies the recipient and the amount required. Whereas on Bitcoin, the payer sends funds to a addresson Lightning, he pays an invoice and the payment is road towards the recipient.
Basic of Lightning Technology (BOLT) refers to specifications that define how different Lightning implementations should communicate with each other. Put simply, it’s the Lightning equivalent of the specifications of the Bitcoin Improvement Proposal (BEEP).
Unlike Bitcoin, which has a reference implementation which is BitcoinCore, Lightning does not have a reference implementation. In contrast, the technology has a specification that each node implementation must follow to be able to interact with others. These are general rules that Lightning nodes must respect in order to be able to exchange information correctly.
Invoice under BOLT 11
BOLT 11 Invoices are Lightning Invoices which are not reusable.
To receive a Lightning payment using BOLT 11, the recipient must generate an invoice with the payment amount and send it to the payer. Of course, it is possible to tap the invoice in the form of a QR code and the Lightning wallets will be able to make the payment correctly.
A BOLT 11 invoice should not be reused, because, after a successful payment, the secrecy of the payment is revealed and known to all participants positioned in the path within the routed network.
If another payment is made with the same invoice, any intermediate node positioned along the path can settle the payment and steal the full payment amount rather than forwarding the HTLC to collect a routing fee. That is why it is not recommended to use such an invoice more than once.
BOLT 11 billing is the most popular way to receive Lightning payments. Many wallets Lightning support these invoices.
The BOLT 12 proposal
Since it is risky to reuse BOLT 11 invoices, payments for goods that are not unique like donations become difficult. It is to solve this problem that developers are working on the BOLT bills 12. BOLT 12 is a proposal from Rusty Russell from Blockstream.
It is possible to reuse BOLT 12 factors as many times as desired. Conversely, with BOLT 11 invoices, it is impossible to leverage a static QR code on its website or on an invoice to receive payments. Each invoice must be created individually and specifically for the payment in question as a security measure.
A “send invoice” functionality is also under development. After scanning a QR code, a Lightning wallet can send an invoice to the seller for payment. A BOLT 12 invoice can also allow you to receive money by scanning a QR code, like a vending machine.
Core Lightning, formerly known as C-Lightning has already integrated BOLT 12 into its implementation. It’s possible that other Lightning Node implementations are adopting BOLT 12 in the coming months. This would be a significant improvement to Lightning’s UX, which at this point is one of the biggest barriers to wider adoption.
LNURL-pay provides a standard for receiving payments on Lightning without the user having to paste an invoice. The solution reverse to the process to transmit a payment. The solution creates a Static URL who can request an invoice from the recipient each time a Lightning user wants to make a payment. In other words, the beneficiary of the payment does not issue an invoice, but the payer sends the payee a request to issue an invoice. The payment recipient sends a response, in which the payer can then add the amount and a comment.
The recipient must specify the minimum and maximum amount of satoshis to be paid. So, when a Lightning user wants to make a payment, they have to choose the amount they want to pay in the range of minimum and maximum satoshis specified by the recipient.
It is therefore a very useful tool that improves the payment experience of Lightning users. Imagine how difficult it would be to receive tips using BOLT 11 invoices. The recipient must generate a new invoice for each tip, which is very complex. With LNURL-pay, the recipient can easily use a static QR code and constantly receive payments.
It is also possible to use LNRUL-pay to send Lightning payments to a lightning address. If you’re using a Lightning wallet that supports LNURL-Pay, you can enter a Lightning address in a specific field.
Only a handful of wallets support LNURL-Pay at the moment although rapid adoption can be expected.
LNURL-POS is a Lightning payment device that can generate a QR code linked to a Lightning invoice and allows receiving a Lightning payment even when offline.
Lightning is an extremely fast and affordable way to make bitcoin payments. As adoption increases, we expect to see more innovation in how Lightning users receive payments. Indeed, it is only by building a frictionless payment system with an elegant UX that Lightning will change dimension.
Source : Medium
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