Jan 16, 2024
Informational – No action or changes necessary from platforms at this time and this information is subject to change for the final release.
Zero Hash is planning to launch support for Lightning Network transactions this year. Withdrawals to invoice addresses will be initially supported in Q2, with additional functionality like deposits and Universal Money Address (UMA) to follow.
This note describes the way some of these features are intended to work in case your teams would like to begin preparing for this launch.
What Is Lightning Network?
Lightning Network is a payment network, sometimes referred to as a Bitcoin L2, however it does not behave exactly like a blockchain. Lightning Network is designed to allow fast and inexpensive transactions compared to L1 blockchains like the Bitcoin Network. The Lightning Network achieves these goals by network participants (nodes) creating channels with each other, so that when payments are made they route along these paths.
How will channels be managed?
Zero Hash abstracts away the complexity of channel management so that you only need to worry about supplying the correct addresses to the endpoints you are already using!
Will my customers have an additional wallet or balance?
No, your end customers will hold and see their balances in their BTC wallet. When making a withdrawal to a Lightning address or invoice, the BTC will be deducted and traverse the Lightning Network without you or your customer needing to hold separate L1 and L2 balances. Likewise, once deposits are enabled, invoices will be able to be created and upon receipt, funds will be credited to the L1 BTC balance.
What invoice formats are supported?
Endpoints used for withdrawals (
/convert_withdrawal/) and deposits (
/deposits/) will update validation logic to support the additional Lightning Network invoice address formats.
When deposits are supported, endpoints used to create deposit addresses (
/deposits/digital_asset_addresses/) will output addresses in the Lightning Network formats listed above rather than the traditional blockchain address formats.