On 6th October, Charlie Lee elucidated on the difference between the on-chain Bitcoin [BTC] and Litecoin [LTC] payments in a series of tweets. The Founder of Litecoin’s release comes in the wake of a discussion with Roger Ver, the CEO of Bitcoin.com, who debated on the different aspects of Bitcoin [BTC].
The first tweet stated:
“On-chain Bitcoin and Litecoin payments are not peer-to-peer. Payments are sent from sender to miners, who record it on a distributed ledger. The recipient receives the payment when it’s recorded. BUT, this is facilitated by a p2p network where transactions are broadcasted.”
Lee basically pointed out to the basic difference between the two different modes of transfer, touching upon the various aspects of peer-to-peer transfer. According to him, the broadcast option improves the transaction certainty of individual transfers.
The second tweet read:
“The broadcast network IS p2p, but strictly speaking payments are not p2p. The sender can ignore the p2p network and directly communicate the transaction to miners to send payments. The sender doesn’t have to have any communication with the recipient in any p2p manner at all!”
This was basically stated by Lee to explain the ease of communication between the sender and the miner. The alternate option, according to him, makes it viable for transactions to be conducted even without the intervention of the sender. This was made clear by Charlie Lee in the follow-up tweet which read:
“This is actually a good thing as the recipient doesn’t have to be online to receive payments. Ironically, on chain payments resembles more closely to a hub and spoke model where the mining pools are the hubs and users just need to connect to those hubs to send payments.”
The hub and spoke model is stated to be the version where every single party involved in the transaction has to be connected to the network for it to occur. He then went on to speak about the Lightning network which is based on a peer-to-peer network. This was explained by Lee, with him stating:
“Lightning network payments, on the other hand, are p2p payments. They are sometimes direct p2p, sometimes indirect p2p. LN payments have to be sent from peer to peer to get from the sender to the recipient. Both have to be online, just like other p2p networks like BitTorrent.”
The mandatory presence of users in the hub and spoke model in on-chain payments is eliminated by the lightning network, which does not rely on any other party for the process to be completed. Lee touched upon this by saying:
“Because LN payments are peer-to-peer, they can work if the peers involved are disconnected from the rest of the internet. The sender can even send payments directly to the recipient by just having a direct connection without relying on any other parties at all.”
The Founder of Litecoin concluded the entire ‘tweetstorm’ by saying that Satoshi’s vision is reflected in Bitcoin with the Lightning Network as it is a perfect fit to the title of Satoshi’s whitepaper on Bitcoin titled “A Peer-to-Peer Electronic Cash System”.