A new feature has been released by Lightning Labs which aims to improve the usability of the lightning network. The lightning network is technology for a bitcoin payment channel with the goal of scaling the cryptocurrency. New ‘Loop’ feature launched for bitcoin payment channels by Lightning Labs.
Users will now be able to receive bitcoin in increasing quantities with the new feature, called “Lightning Loop,” without having to close and reopen new payment channels.
When users open a payment channel they are required to pay the same fees and wait the same amount of time as when they send a regular bitcoin transaction on the blockchain. Once the payment channel is opened, however, a user is able to send bitcoin payments at a fraction of the cost, and almost instantaneously.
Alex Bosworth and Bryan Wu, the Lighting Labs developers described in a blog post that normally, these payment channels are set up by users with a fixed capacity
“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.”
In order for users to keep using the same payment channel to receive bitcoin, this inbound capacity can be withdrawn with Lightning Loop.
In their post Bosworth and Wu explained that what the Lightning Loop does is move funds out of a payment channel and “into a bitcoin wallet, cold storage, or fiat currency via an exchange”. “This emptying of the channel allows [a lighting user] to receive more payments.”
Bosworth and Wu called it the “Loop Out” feature, while highlighting that they were working on a feature to enable payment channel refills, basically an opposite “Loop In” with “on-chain bitcoin from wallets or exchanges.”
“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”.
Lightning Labs has received much positive reception from users since the alpha release of the tool; so much so that, Marco Pesani, product development director of bitcoin wallet Conio, went so far as to tweet:
“Loop from [Lightning Labs] solves one of the biggest lightning network pain points: channels liquidity management … I’ve never seen so many advancement and such focus on the final objective. Massive.”