Corporate Finance News

Lundi 11 Juillet 2016

The Bitfury Group Releases White Paper: “Flare: An Approach to Routing in Lightning Network”

Today the Bitfury Group released a white paper about Flare, a hybrid routing algorithm for payment routing on the Lightning Network.

The paper suggests a two-phase algorithm: (1) a proactive update of the node’s routing map, which stores information about network topology, along with (2) reactive collection of information as needed when required by a Lightning Network request. This white paper is the first attempt to describe and preliminarily test an algorithmic solution for future implementation of the Lightning Network on the Bitcoin Blockchain that will allow for transaction processing scalability. The paper is a product of collaboration with co-author Olaoluwa Osuntokun, and the rest of the Lightning Network team.

About the Lightning Network
The Lightning Network is a promising overlay solution that enables micropayments and increased transaction processing on the Bitcoin Blockchain. The Lightning Network operates as a network of bidirectional payment channels that transfer value off-blockchain. The network is also designed to be decentralized, eliminating the need for custodial trust. The security of the network is enforced by smart contracts using Bitcoin’s built-in scripting capabilities. Additionally, instead of creating on-blockchain transactions for individual payments, the broadcasting of these transactions is deferred. The Lightning Network can also be deployed on other blockchains, or between blockchains with interledger transactions.

About The Flare Algorithm
Flare will allow for huge scalability of the transaction processing power of the Bitcoin Blockchain network, with transactions per second (tps) capacity potentially exceeding that of legacy payment rails (such as Visa or PayPal). After implementation of Flare, we expect to achieve performance of at least 400 tps per single payment channel, and more than 100,000 tps for network overall in our test environment by the end of July.

One of the defining features of the Lightning Network is the ability to route payments between network users without the need to trust one or more intermediaries. In most cases, it should not be necessary for parties to create a direct payment channel in order to complete a payment. Payment routing, or finding a path of payment channels, is therefore an issue of particular importance for the Lightning Network. Any solution should route the payment from the sender to the recipient and be optimal according to certain criteria (such as time to complete the payment and/or routing expenses). To succeed at scale, the Lightning Network will likely need a fully automated solution to payment routing.

The design goal for Flare is to ensure that routes can be found as quickly as possible for the Lightning Network while minimizing the amount of data stored on devices and maintaining decentralization. This is accomplished at the cost of each node proactively gathering information about the Lightning Network topology, as well as reactively gathering information about the topology as needed for transaction requests. The collected information includes channels within a low hop-distance (local “neighborhood”) and paths to randomly selected nodes (“beacon” nodes) farther away. The existence of payment channels is verified using information on the Bitcoin Blockchain and data provided by channel parties. As a result, a node will have a well-illuminated map of its local neighborhood within the network, with random patches of visibility further away enabled by the selection of beacon nodes. The combination of local and beacon nodes allows a node to minimize routing state, while finding routes to any given node with a high probability. We have performed simulations of the routing algorithm and find it to be scalable to at least 100,000 nodes.

About The Bitfury Group
The Bitfury Group is the leading full service Blockchain technology company and one of the largest private infrastructure providers in the Blockchain ecosystem. The Bitfury Group develops and delivers both the software and the hardware solutions necessary for businesses, governments, organizations and individuals to securely move an asset across the Blockchain. The expertise of The Bitfury Group ensures successful, easy, fast, secure and cost-effective connectivity to the Blockchain. The Bitfury Group is a global team of experts in technology, business, communications, security and civil society. The Bitfury Group believes the Blockchain can and will open new doors for global economic opportunity and prosperity, and its mission is to create and advance Blockchain applications that will further promote innovation and the advancement of the peer-to peer economy and the Economy of Things.

For more information about Lightning Network, see:

Read the whitepaper here:

Pour lire tous les articles Finyear dédiés Blockchain rendez-vous sur

Participez aux prochaines conférences Blockchain éditées par Finyear :
Blockchain Vision #5 + Blockchain Pitch Day #2 (20 septembre 2016)
Blockchain Hackathon #1 (octobre 2016)

Les médias du groupe Finyear

Lisez gratuitement :

Le quotidien Finyear :
- Finyear Quotidien

La newsletter quotidienne :
- Finyear Newsletter
Recevez chaque matin par mail la newsletter Finyear, une sélection quotidienne des meilleures infos et expertises en Finance innovation, Blockchain révolution & Digital transformation.

Les 6 lettres mensuelles digitales :
- Le Directeur Financier
- Le Trésorier
- Le Credit Manager
- The Chief FinTech Officer
- The Chief Blockchain Officer
- The Chief Digital Officer

Le magazine trimestriel digital :
- Finyear Magazine

Un seul formulaire d'abonnement pour recevoir un avis de publication pour une ou plusieurs lettres

dernières opinions & actus / latest opinions & news