Lightning network, which is based on BOLT protocol, supports only point-to-point cryptocurrency transactions. It is of no help when it comes to fiat transactions. Furthermore, Lightning networks suffer from disadvantages such as requirement of large storage capacity (tens of gigabytes of storage capacity), continuous internet connection, lack of speed in routing, high channel opening costs, preference to connect hubnode, and drying up of channels.
All these issues were resolved by the LITEX team of developers. LITEX, a fully decentralized cryptocurrency payment network, facilitates payment involving three parties. The transaction is guaranteed through smart contracts. Notably, the facility supports even fiat transactions and does not require participation of a centralized payment organization.
The ecosystem executes two different kinds of processes, namely main and sub-process. As shown in the image below, in the main process, the customer completes the purchase using a cryptocurrency, which moves in a counter-clockwise direction. In the sub-process, the cryptocurrency moves in a clockwise direction, when the exchanger swaps the fiat money for cryptocurrency. Both processes will be coordinated by LTXN, the native currency of the LITEX ecosystem.
How a transaction is completed?
In the main process, the acquirer passes the billing information, typically in the form of a payment QR code (or via a near field communication (NFC) payment terminal compatible with Apple Pay), to the merchant. The customer initiates a payment request via an e-wallet that is compatible with LITEX, the request is then transmitted to LTXN, and is designated a payment routing by way of a matching algorithm. The payment request is routed to the exchanger with the highest degree of matching.
In the sub-process, the exchanger settles the transaction with the merchant via the QR code or the payment terminal using fiat money, and the acquirer, after confirming that the payment has been withdrawn, sends the R to exchanger, who, after sending the R back to LTXN, immediately receives the corresponding amount in a cryptocurrency. Finally, the R is returned to the customer, who after verifying the R, makes the payment with a cryptocurrency to the corresponding downstream nodes in LTXN, completing the entire transaction process.
Depending on the request, there can be two types of conversion scenarios
- A less urgent conversion process aimed to reduce costs. In some cases, a user may even set a “cap”, allowing the process to be terminated any time during the course of the transaction.
- A highly urgent conversion process, with a higher fee option. Obviously, the aim is to receive the cryptocurrency without any delay.
In a real-life scenario, all transactions will lie somewhere between the scenarios discussed above. LITEX has quantified the ratio as the form of reference data for the self-adaptive matching decision-making of the entry nodes. In addition, in terms of the amount being matched, the LTXN nodes need to match multiple qualified requests across the entire network by taking into account several factors, including but not limited to the type of currency, the monetary amount of the transaction, channel time cost and channel transfer loss. The matching strategy also considers the cost of building an inter-network channel if the recipient and the issuer of the payment use two different networks that are not interconnected.
All LTXN nodes have a set of strategies for the synchronization of an autonomous negotiation algorithm and a node information cache, assuring that a route is determined as soon as a request comes in and that the transaction is completed. The entire process happens in in the shortest time possible.
The light node
LITEX designed the LTXN nodes based on Simpliﬁed Payment Veriﬁcation (SPV), and added some data records to the basic business model. As a result, the LTXN nodes need to neither maintain a complete node, nor store all user transactions across the entire network. It needs only to store the transactions related to users who have built a route to the node. Once the channel is closed and the transaction is confirmed on the main chain of the blockchain, the remaining nodes on both sides of the channel will be written back onto the main chain, allowing the user to delete previous transaction data to optimize their storage space. Smartphones generally support optimized LTXN nodes that don’t take up too much storage space.
Protection of capital against network attacks
Stability is securely insured by LTXN and its Smart Contracts. The payment channels are built on smart contracts, which have strict rules of accessing the assets. The balances are locked in the channel. No capital loss would accrue even if the network is attacked.
Scalability at negligible fee
With the increasing nodes in the LTXN, LITEX has the ability to handle millions transactions per second, with extremely low transaction fee. LITEX aims to provide the best crypto payment experiences to every crypto currency users.
- LITEX bodes can work on smartphones
- Distributed routing
- Discourages centralization
- Smart matching ability
- Improved BOLT protocol
With the resources in the payment industry, LITEX ecosystem can easily spread out to various merchants all over the world, as they do not need to make any changes in their current settlement procedure. Making LITEX acceptable on a wide range.
Some of the endless possibilities are given below
- Some of the endless possibilities are given below
- Acceptance in retail stores and other businesses
- Buy/sell cryptos through website/app
- P-2-P exchange of cryptos
- Buy Amazon or any other gift card with cryptos