CourseWork

Lighting Network is the future of payments!

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This looks like a simple QR code advertisement in a window, which it is… except for the technology behind it. There are 4 QR codes displayed on a screen outside of a cafe window each with the current price of the coffee updated in BTC, in real time. Let’s say you want the “Blockaccino” for $4.60, you simply open up your smartphone with a Lighting Network Bitcoin wallet, scan the QR code to make an instant payment and walk inside to retrieve your order. This is perfect for the anti-social basement Bitcoin geek, you don’t even have to talk to people to grab a coffee!

This is a combination of every brilliant advancement in blockchain payments to make instantaneous and essentially free transactions between two parties and all without an intermediary bank saying its OK.

How this all works is incredibly simple for the end user but involves some brilliantly crafted decentralized software called the Lighting Network. A 2nd layer protocol that runs on top of Bitcoin providing instant payments with other Lighting Network participants. A high-level look at how this works is by creating a payment channel that Bitcoin funds can transfer from account to account inside for free until the payment channel is closed and a broadcast is sent to the blockchain settling the exchange of bitcoin. A simpler way of imagining this is to have a group of friends standing outside of a bank, they have cash and are making bets on a dice game, while freely exchanging money back and forth as much as they want to play the game. When the players agree they want to stop playing the game and put their cash into the bank they all agree and deposit the funds into their respective bank accounts.

The QR codes are generated automatically every 217 seconds to ensure Bitcoin prices match the dollar equivilant. If a payment is received before the time is up the transfer is accepted and a receipt on your smartphone or device is generated for proof of purchase. All the customer has to do is walk inside and wait for their order number to be called out.

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