The prominent US university is testing a network that in combination with smart contracts can process millions of complex transactions.
The Lightning Network will be able to broadcast BTC price through smart contracts on an automatic basis taking into account external events, e.g. the weather on the day of trading, the current US dollar rate or some data from the stock market.
The system was first suggested by Tadge Dryja, a researcher at Massachusetts Institute of Technology (MIT), last summer. But this is the first time that it’s been tested with working code. Since last year Dryja has been improving the idea along with Alin S. Dragos, another researcher at MIT. To achieve their purpose, they have been using “oracles”– trusted entities which are to transact data to smart contracts.
BTC smart contracts
The Lightning Network ensures the scalability to the Bitcoin platform, but smart contracts give this virtual currency some new functionality. For example, users would be able to make some kind of bets on the basis of the global news. Or people would be able to use futures contracts. E.g., they will pay their debts in BTC in US dollars depending on the exchange rate on the payday.
Still, the main advantage of the new upgrade is that the scalability issue of Bitcoin will be solved as in that case a lot of data will be kept outside the BTC Blockchain.
Later at some point, the developers plan to sell this technology to some big companies, which will be able to adapt it to the needs of common users in a much better way.