Bitcoin May Be Getting A Major Lightning Network Upgrade

Bitcoin’s slug over the past week may be a wake up call to it’s developers to start a total revamp of the network’s technology. The lightning network of Bitcoin which just begun operation for transactions is up for a returning.
Lightning network is known said to make the capacity of bitcoin much larger than before – but it has a problem; users of the network need to store a very huge amount of data on their own. The actual problem of this is that downloading this data becomes very difficult and makes the network difficult to run. Difficulty in running the network is essentially opposed to the core idea behind the creation bitcoin to begin with. This is why the developers of the lightning network are looking at how to make available a simpler off-chain transaction medium as an alternative to the current network. “Eltoo”, as it will be called, is the next project of developers Rusty Russell, Laolu Osuntokun, and Christian Decker.

Eltoo will be looking at storing data of just “the most recent off -chain transactions” to help avoid data loss and cryptocurrency loss eventually.
Decker, noted that losing cryptocurrency because of a lightning network issue was a thing he had personally experienced. He said

“I had an old lightning node on my laptop. I restored it. I didn’t know I didn’t have the newest state. The guy closed the connection because they knew it was an old state! Because he could steal it. Which he did, by the way.”

Eltoo Will Solve The Long Term Revoking Issue of Bitcoin

Bitcoin developers have long being looking at alternatives to the storing of huge chunks of data on the blockchain network. The first idea was to assign numbers – sequence numbers – to transactions such that each transaction given a unique number which was updated per transaction by the miners.
However, a hiccup to this was that miners did not have any reason at all to update or replace old numbers with newer ones of newer transactions. Thus money loss in such a system was just too haunting an idea to bear with. This prompted the need for a fix. And then came the L2 network which came up with the penalty for miners who refused to update the transaction numbers. The punishment was that the cheating miner lost money for using an older transaction number for a newer transaction.

Surprisingly, Eltoo will be going back to the allocation of sequence numbers but this time around with the code to ensure the number updates are done by miners. Commenting on the differences of both the L2 network and Eltoo, Decker stated in a CoinDesk interview that

“Eltoo has quite different tradeoffs. I’m not implying it’s better in all senses,… We don’t know which one is nicer, but I would like eltoo as the better option. I think eltoo is easier to explain and to extend later on.”

Should the proposal for the update go through, Bitcoin’s codebase will have to be updated with the sighash code. This alone could take forever, Decker believes jokingly; alluding to how long it took for SegWit to be implemented.
What happens next will definitely go a long way to affecting the way Bitcoin performs on the market. It appears that most developers are excited by the proposal of Eltoo, and are anticipating its introduction. The name Eltoo is actually a phonetic play on “L 2”, standing for Layer 2, a term mostly used to refer to lightning networks for off chain transactions.

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