Visa is left behind, the beta version of ThunderNetwork code has been open sourced

Blockchain.com's goal is to build an open, accessible, and fair financial future. Since our founding, we have focused on providing users with simple and easy-to-use products that allow people to easily use Bitcoin to store value and transfer wealth around the world. We make Bitcoin simple and practical. We can do this because we always focus on user needs.

A fast, low-fee, and more versatile network is extremely valuable to users, so we are excited to see the first results of our research on payment channels in the Bitcoin network and to see innovative uses of this technology. We are very interested in using smart contracts to build ultra-fast payment networks, such as the technology presented in the Lightning Network team's white paper. Last year, we found a talented engineer, Mats Jerratsch, who has achieved innovative results with our engineers and led the team to research and develop these ideas in a network.

Previously, Lightning Networks only existed in concepts, research bases, test networks, and labs. Today, we are releasing the first usable version of Lightning Networks, our Raiden Network, which is currently in alpha testing, and is a payment method for Bitcoin off-blockchain transactions and then back to the Bitcoin main blockchain.

The Raiden Network can improve security, trustlessness, and instant payment functions. It has the ability to liberate small and micro payments, effectively relieve the load of the Bitcoin network, and improve user privacy. In this Alpha version, these have been verified by us. From a functional perspective, it is not only a node but also a wallet with a graphical interface. More importantly:

1. Settlement in the Bitcoin blockchain

2. Scale: According to our tests, we can handle a higher throughput than Visa (100,000 TPS) as long as there are less than a thousand nodes in the network.

3. Ultra-low payment fees: Fees will naturally be lower, and in an open free market and permissionless network, this will fundamentally be lower than on-chain payment fees.

4. Encryption and Verification: All communications between nodes and wallets are encrypted using AES-CTR and can only be communicated after being fully verified.

5. The network topology uses a Gossip protocol similar to the Bitcoin network to automatically provide seed nodes, which can synthesize routes through multiple hops.

6. By settling on the Bitcoin blockchain, payment tunnels can be opened and closed at any time.

7. Payment contention: With each hop through the routing, the next hop is renegotiated, and this time the path the payment takes through the network is cryptographically secured to avoid fraud.

8. Payment relay: The Lightning Network automatically provides relays for every payment through multiple nodes and uses encrypted routing. No one will know who the payer is this time, which better protects privacy.

9. Payment processing is done automatically without human intervention. The payment process will automatically return payment proof from the network.

10. Payment is instant, and when you see the payment, it is irreversible.

Before CSV (Check Sequence Verify) and SegWit (Segregated Witness) are applied on the Bitcoin blockchain, the transfer of Bitcoin protocol layer is not possible. Therefore, the current Raiden Network model is most suitable for transferring between trusted network users. You can use it in your development team or between trusted network friends, but do not make actual payments. Remember: this software is still in the alpha testing stage.

So why are we releasing it now? We believe it’s urgent to get something useful to users as soon as possible, so we can get feedback as soon as possible, so that we can be fully prepared if the Bitcoin network is strained. So please check it out, test it, start a discussion on GitHub, or send us an email. If you want to immerse yourself in technology like this, please join us.