Exploration of the Design Logic of Bitcoin Lightning Network and Thunder Network

1. The Payment Dilemma of Bitcoin

Bitcoin, as a decentralized and immutable digital currency, faces numerous challenges in actual payment scenarios. Issues such as long transaction confirmation times and high fees make it difficult to use Bitcoin for purchasing everyday goods. The conservative script structure of the Bitcoin network limits off-chain interaction scenarios, failing to meet people's demand for fast small-value payments.

2. Lighting Network: Advantages and Limitations

The Lighting Network, as a scalability solution for Bitcoin, achieves high-frequency accounting by establishing exclusive payment channels between users. Its principle is similar to settling accounts in one go after friends accumulate multiple expenses. However, this design exposes multiple dilemmas in practical applications:

1. The threshold for building a channel is high, requiring funds to be locked in advance.
2. Complex routing issues may cause transactions to fail due to insufficient funds in intermediate channels or unavailable nodes.
3. There are security risks, requiring users to remain online to prevent fraud.

Although the Lighting Network has been running for many years, its actual application still struggles to break through bottlenecks. The total amount of funds locked in the network is only around 100 million USD, which is negligible compared to the trillion-level market value of the Bitcoin system.

3. Thunder Network Protocol Analysis

The Thunderbolt network is a soft fork upgrade scheme based on the Bitcoin main chain, making changes at the protocol level to enhance Bitcoin's scalability, transaction performance, and programmability.

Main features include:

1. Using UTXO Bundling technology, the transaction speed is increased by about 10 times.
2. Reintroduce and expand the OP_CAT opcode to enhance smart contract functionality.
3. Launch the Goldinals unified asset standard, based on zero-knowledge proof and state commitment.
4. Launch the BitMM system, supporting on-chain automated market making and trustless trading.

Unlike traditional scaling solutions, the Lightning Network adopts a "native on-chain scaling" path, where all functions run directly on the Bitcoin main chain, using native BTC instead of cross-chain mapped tokens.

Core Mechanism

1. Flexible and adjustable multi-signature: Split the signature into user parts and committee parts, achieving non-interactive transfer through secret sharing.

2. Asynchronous Fault-Tolerant Committee Ledger: A service group composed of multiple nodes is responsible for accounting, ensuring decentralization and security.

3. Atomic Swap Finalization: Ensure seamless off-chain reconstruction and on-chain redemption through a three-step atomic swap process.

Key Innovation

1. Non-interactive, recursive signature delegation: Reduces communication and online requirements.
2. Update signature for each transfer: Prevent old signatures from being reused.
3. Minimize on-chain operations: Enhance efficiency and privacy protection.
4. Offline Security Assurance: The committee mechanism ensures the safety of funds.
5. Formal verification: Use the Tamarin Prover tool for security proof.

4. Comparison of Thunder Network with Existing Lighting Network Solutions

The Lightning Network has advantages in security and theoretical completeness, but it also has disadvantages such as complex deployment, limited compatibility with the main chain, and insufficient ecosystem support.

Advantages:

• The protocol design can prove security
• Prevent malicious users from profiting unilaterally

Disadvantages:

• Deployment is complex, making it difficult for ordinary users to get started.
• Main chain compatibility is limited
• The ecological support is still in its early stages.

5. Potential Impact and Development Path of the Lightning Network

The Lightning Network is regarded as the theoretical optimal solution for Bitcoin, but practical applications are still in the early stages. Its potential development paths include:

1. Integrated with Rollup: As a DeFi engine on the Bitcoin sidechain, such as in combination with projects like BOB, RGB, BitVM.

2. Establish an independent standard ecosystem: Develop your own network ecosystem, node operation and maintenance system, and aggregator, which may include dedicated wallets, nodes, DEX, and AMM.

3. Replaced by simpler solutions: If future solutions emerge that do not require complex state channels and off-chain protocols.

The greatest significance of the Lighting Network lies in providing composability for off-chain contracts for Bitcoin assets, introducing two major features: UTXO Bundling and OP_CAT, which bring native programmability and the potential to increase transaction throughput to the Bitcoin network. However, the Lighting Network is still in the theoretical research stage, and there is still a certain distance from practical application.