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
6 Pages Posted: 28 Mar 2019
Date Written: 2019
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
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