Stellar Gears Up to Implement Lightning Network

Last week, on March 15, 2018, Lightning Labs unveiled their beta for the Lightning Network in a flash of media attention and enthusiasm. The Lightning Network has been heralded as a solution to Bitcoin’s scalability issues, and the developments were greeted by the community with tremendous optimism.

A little less than a week later, the Stellar network team has announced that they will be integrating the Lightning Network. That makes Stellar among the first projects to formally announce integration of the Lightning Network since the beta release last week.

“We’re super excited about Lighting,” Stellar founder Jed McCaleb told Bitcoin Magazine in an interview. “It’s a great idea and a necessary one if any of these protocols are going to achieve their vision.”

To McCaleb, Stellar isn’t an exception, and he believes that the Lightning Network will be integral to the growth of the platform going forward:

“We have a lot of partnerships that have been announced and that will be announced soon that will start pushing the threshold for what Stellar can do. In order to keep the network efficient and stable, we need something like Lightning.”

The blog post echoes these sentiments, as it claims that the Lightning Network will help Stellar move forward into a more scalable future. McCaleb has actually toyed with the idea of implementing the Lightning Network since the technology’s theoretical infancy. In a 2015 blog post, he wrote somewhat of a treatise on the subject, outlining how the network operates and stating that a “Lightning-like system” is already feasible on Stellar.

With today’s announcement, McCaleb and the rest of the team are dropping the “like” and keeping the “Lightning,” going for a full-scale implementation on Stellar’s platform. They’ve released a tentative timeline regarding this implementation that included a BUMP_SEQUENCE testnet on April 1, 2018; beta implementation for state channels on August 1, 2018; a livenet on Stellar for these state channels and a Lightning Network Beta on October 1, 2018; and fully functional livenet for the Lightning Network on December 1, 2018.

The addition of the BUMP_SEQUENCE operation and state channels are hallmarks of Stellar’s individual implementation of the technology and reflect McCaleb’s original plans for Stellar’s use of it. Like payment channels on Bitcoin’s Lightning Network, state channels will be the off-chain avenue through which users can conduct payments, but they’ll be open to additional network features, as well, “such as … creating, deleting or changing permissions on accounts.”

These channels will make use of source accounts and sequence numbers to keep tabs on payments before the finalizing transaction is sent to the network. As the name suggests, a source account represents a user’s account on a state channel, and the sequence number tracks the number and sequence of payments made within that channel.

According to the blog post, “The new operation enables transactions to arbitrarily increase the sequence number of a target account.”

The team will release further developments to detail how state channels can be used for “multi-hop payments” between users without established channels and cross-chain atomic swaps. In addition, it invites peer review and feedback from the community and researchers as the current schematics are not final.

For now, though, McCaleb and the rest of the team are focused on getting the ball rolling so Stellar users — and the rest of the crypto ecosystem — can start reaping Lightning’s benefits:

“There’s three main benefits,” he said to Bitcoin Magazine. “There’s the scalability benefit, obviously — Stellar can scale pretty well right now but Lightning takes that much, much further; there’s privacy benefits, as Lightning allows transactions to be kept off the public ledger; and then there’s also interoperability,” he said in reference to the prospect of Atomic Swaps.

“It should make a much more flexible, interoperable ecosystem which is good for everyone.”