LApps: Technological, Legal and Market Potentials of Blockchain Lightning Network Applications

Forthcoming, Proceedings of the 3rd International Conference on Information System and Data Mining (ICISDM2019), proceedings to be published by ACM in the International Conference Proceedings Series

The Chinese University of Hong Kong Faculty of Law Research Paper No. 2019-04

6 Pages Posted: 28 Mar 2019

See all articles by Mahdi H. Miraz

Mahdi H. Miraz

The Chinese University of Hong Kong (CUHK); Wrexham Glyndŵr University

David C. Donald

Chinese University of Hong Kong - Faculty of Law

Date Written: 2019

Abstract

Following in the footsteps of pioneer Bitcoin, many altcoins as well as coloured coins have been or are being developed and merchandised adopting blockchain as the core enabling technology. However, since interoperability and scalability due to high and capped (in particular cases) transaction latency are deep-rooted in the architecture of blockchain technology, they are by default inherited in any blockchain-based applications. Lightning Network (LN) is one of the supporting technologies developed to eliminate this impediment of blockchain technology by facilitating instantaneous transfers of cryptos. Since the potentials of LN is still relatively unknown, this paper investigates the current states of development along with possible non-monetary usage of LN, especially in settlement coloured coins such as securities, as well as creation of new business models based on Lightning Applications (LApps) and microchannel payments as well as micro-trades. The legal challenges that may act as impediments to the adoption of LN are also discussed.

Keywords: Blockchain; Atomic Swap; Lightning Network; Cross-chain Trading; Cryptocurrencies; Cross-listing; Wallet-to-Wallet Transfer; On-Chain; Off-Chain; Layer 2; Hashed Timelock Contracts (HTLC); Payment Channels; State Channels; Coloured Coins; DAO; ICO; DApps; LApps

Suggested Citation

Miraz, Mahdi H. and Donald, David C., LApps: Technological, Legal and Market Potentials of Blockchain Lightning Network Applications (2019). Forthcoming, Proceedings of the 3rd International Conference on Information System and Data Mining (ICISDM2019), proceedings to be published by ACM in the International Conference Proceedings Series; The Chinese University of Hong Kong Faculty of Law Research Paper No. 2019-04. Available at SSRN: https://ssrn.com/abstract=3348944 or http://dx.doi.org/10.2139/ssrn.3348944

Mahdi H. Miraz (Contact Author)

The Chinese University of Hong Kong (CUHK) ( email )

Shatin, N.T.
Hong Kong
Hong Kong

HOME PAGE: http://www.mahdimiraz.theiaer.org

Wrexham Glyndŵr University ( email )

Mold Rd.
Wrexham, LL11 2AW
United Kingdom

HOME PAGE: http://mahdimiraz.theiaer.org/

David C. Donald

Chinese University of Hong Kong - Faculty of Law ( email )

Faculty of Law
6/F, Lee Shau Kee Building
Shatin, New Territories
Hong Kong
852 3943 1042 (Phone)
852 2696 1040 (Fax)

HOME PAGE: http://www.law.cuhk.edu.hk/en/people/info.php?id=10

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