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First Bitcoin, then Litecoin, and now…Stellar? In an unlikely turn of events the developers of the sixth-largest cryptocurrency have revealed plans of a second-layer payments system, which could possibly open the door to an instantaneous off-chain settlement with no fees. Announced via a Medium post, Interstellar revealed an early demo for Starlight, a Lightning Network for the Stellar Lumens crypto.
This move could potentially see XLM moving in the same direction as Bitcoin and Litecoin, which have also explored off-chain payments as redemption for their longer block times and growing fees. Instead of paying multiple fees for multiple payments, users can escrow their funds in a multi-signature wallet, allowing for numerous bi-directional transactions for only a single set of fees, all utilizing off-chain payment rails.
“Normally, making a payment on a network like Stellar involves publishing details of the payment to all observers, paying a small fee, and waiting for the network to reach consensus and confirm the payment. A payment channel, on the other hand, uses the network to “lock up” some funds for use by the channel’s participants. They may then pay each other these funds without further involving the network. Such payments are thus private, instant, and free.” – Dan Robinson
With this, comes minor complications. When there are more than two participants involved, multi-hop payments have proven to be Lightning Network’s kryptonite, causing long delays and unexpected problems.
”Starlight payment channels are analogous to the Bitcoin payment channels used in the Lightning Network. As we extend the Starlight project to support not only payment channels but also multi-hop payments across those channels, we plan to build in compatibility with other payment-channel networks, such as Lightning and Interledger.” – Dan Robinson
Although it’s too early to get excited as the testnet-only demo is not fully practical, even for limited use. XLM developers warn users to expect bugs and incompatible updates. Regardless, this a leap forward not only for XLM but crypto as a whole.
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