Lightning Network Daemon (LND) is an overlay network built on top of an existing blockchain protocol. LND creates an entirely new layer, providing instantaneous, high-volume transactions that are designated in the blockchain’s standard currency.
Beyond Query has utilized the LND protocol, improving the scalability of blockchain currencies like Bitcoin by streamlining the number of nodes involved in each transaction. As a result removing the typical on-chain Bitcoin transaction that is transmitted, verified and stored by many thousands of nodes; removing hindering fees and delays for users
How does it work?
A “channel” is created connecting two peers with assigned funds on the blockchain within the network. Both parties to sign off the order of the funds to/from the entry. Thus creating a single on-chain blockchain transaction.
To transfer funds, both participants exchange digital signatures directly with each other each time to have their balanced updated in the “channel.”