Pizza Day marked an important first in the history of bitcoin. A bitcoiner traded their crypto for a real-world item for the first time. On May 18th, 2010 a bitcointalk.org user named Hanyecz (now named Laszlo) offered to trade 10,000 BTC for two pizzas. At the time of the trade, BTC was valued around $0.41. Today, BTC is regularly trading for more than $10,000 USD according to CoinDesk.
A modern-day value for that sum of BTC is more than $100,000,000. A similar milestone for the Lightning Network occurred on Friday, Jan. 19th, 1018. Using BTC on the mainnet, btc_throwaway1337 purchased a router from TorGuard. According to Bitcoinist, he announced the following:
I used Lightning Network’s mainnet (via lnd) to purchase an AR300M VPN Router through TorGuard, and it’s here! This may have been the first ever physical purchase on LN.
The exchange of physical goods over the Lightning Network provides hope for a long-awaited solution to the scalability issues which plague bitcoin. While the solution is still likely at least a few months from viable implementation, the successful mainnet test bodes well for the coming days.
What improvements over the current bitcoin network does Lightning offer?
The Lightning Network offers a unique solution to increase transaction throughput for the bitcoin network. State channels are a form of side-chain which lets users freeze a certain amount of funds in the channel, transact as many times as they want, and then only the final totals for each user are recorded to the mainnet.
Say User A wants to trade several items to user B. They would first put forward funds to start the channel (also called funding the channel). Once the channel has been created, User A can send User B 10,000 transactions for 1 BTC each, but these will not be official until both users agree on the outcome and the channel closes.
After User A and User B agree, the channel is closed, and the mainnet records that User A sent User B 10,000 BTC in only one transaction.
How long has Lightning been under development?
Lightning Network was initially conceived in January of 2014 to address the apparent scalability issues with bitcoin. Since that idea was fleshed out, Lightning has undergone development by several disparate teams, and been shaped into a functional product which was first implemented on the Litecoin (LTC) Network in April 2017.
In order to activate Lightning in the bitcoin ecosystem, SegWit had to be activated via a User Activated Soft Fork (UASF) which required more than 90% of the network to agree on the protocol upgrade. SegWit launched on August 24th, 2017 according to CoinDesk. The remaining barrier is testing, continued development, and activation of Lightning for bitcoin.
As of the time this article was written, the Lightning Network mainnet held over 100 nodes and 200 channels. Its value exceeds $15,000 worth of satoshi.