Over the past two years, the majority of bitcoin developers in both the open-source development community and private sector have advocated for the integration of second-layer payment channels like Lightning, to enable micropayments or small transactions with lower fees.
Given the 1 MB block size limit of the bitcoin blockchain, it is not currently possible to settle small transactions with low fees. With the size of the bitcoin mempool often in the range of 50 million to 100 million bytes, it is virtually impossible to settle a small transaction such as a $1 payment on the main bitcoin blockchain.
But, second-layer solutions like Lightning create payment channels launched on top of the main bitcoin blockchain and allow users to send and receive batches of small transactions. The mechanics of Lightning and second-layer solutions for bitcoin are similar to a tab in a bar or a restaurant. Many transactions add up and eventually, the payment is processed as one single bill. In bitcoin, hundreds of transactions can be combined into one single transaction and broadcasted to the bitcoin network.
In spite of the hype and excitement around Lightning and other second-layer payment channels, the vast majority of bitcoin wallet platforms and exchanges have still not implemented any of the available second-layer solutions…