The Lightning Network needs to get bigger. To ensure that as many people as possible, the network must be practicable. Boltz wants to help. The simple change tool ensures the easiest transfer of BTC into the Lightning Network and at the same time preserves the credo BYOB – Be your own bank for the end user.
On the long road to everyday use of Bitcoin, one concept is always in focus: scaling. The purpose of these dialogues, which have been going on for years, is a virtually royalty-free and instant payment option. The most sophisticated solution for this is the Lightning Network. Created as a second layer, payments are not posted on the actual Bitcoin Blockchain (on-chain), but remain for a certain time in the Lightning Network (off-chain). Thousands or millions of transactions can be combined into a single on-chain transaction. Within the Lightning Network there are some problems to solve, like this one: How do you get the desired amount from the blockchain (on-chain) to the lightning network (off-chain) and vice versa? For this, Boltz promises to be a viable end-user solution after months of development.
The problem that the team behind Boltz has targeted is something like this. So far, the Lightning Network is poorly suited for irregular transactions, which is due to several vulnerabilities. If you want to send a BTC from A to C without having set up a payment channel with C, you can use the payment channel to B, which in turn has a connection to C. A, B and C are nodes (= nodes) in the Lightning Network. In this case, a BTC must already exist both in the payment channel AB and in the payment channel BC. In the case of Lightning Network, this is called a payment route. So if there is not enough BTC in the Lightning Network, many of these payment routes are impractical. However, it automatically implies that Lightning works the better the more BTCs are fed into the network. The second important size is therefore the attached nodes and payment channels.
At this point, Boltz now turns on. As a catalyst Boltz is supposed to contribute to “reaching the point where the network effect [briefly outlined above] makes itself felt,” according to a post on the journalist platform medium.com. Consider here the concept of critical mass. From a certain “mass” of nodes and BTC in the Lightning Network, the software is likely to find a viable payment route. In the case without the user having to set up new payment channels or to feed more BTC into the network.
” The interested trader has limited possibilities to build enough liquidity in the Lightning Network – either asking others to build a channel with their own node, or using a service like Loop or Boltz. Boltz allows you to swap the amount you need [in the Lightning Network] without having to trust a third party or investing time to grow capacity naturally.
What happens behind the scenes
At the programming level, Boltz builds on the so-called Submarine Swaps, a form of atomic swaps, which was developed by the cryptographer Alex Bosworth.
The Submarine Swaps are again Hashed Time Locked Contracts (HTLC), which ensure that an amount x of a valid on-chain address arrives at the desired address in the Lightning Network. An address in the Lightning Network is called Invoice and contains more information than a conventional Bitcoin address. To mention three differences: The Invoices is an expiration date, a traditional Bitcoin address (in case of a bug, the amount is returned there) and a payment route inscribed. Viewed from the outside, this technology makes for a fiduciary exchange from one address to another. In the end, you save yourself a supervisory body while maintaining security. In short: The exchange is cheaper.
The trial version, which has now gone online, will be examined together with the community for vulnerabilities over the next few months. The operation of Boltz is kept simple. The user does not need to know about the Command Line, as with Loop. You do not have to sign up. The exchange is done in real time. In addition, the exchange works in both directions, for BTC and LTC alike. Potential risks are pointed out when using the service. In addition, on ways to get back the corresponding balance in the event of a bug. In addition to the elimination of possible weak points, the Boltz team wants to work primarily to ensure that their users are no longer dependent on the Boltz node. Rather, they should be able to use their own node in the network as a starting point.
The team behind Boltz is as excited about feedback as possible – just join their discord channel and report back where there are problems.