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arxiv: 1906.11946 · v1 · pith:W44MBE6Vnew · submitted 2019-06-20 · 💻 cs.CR

LApps: Technological, Legal and Market Potentials of Blockchain Lightning Network Applications

Mahdi H. Miraz , David C. Donald This is my paper

Pith reviewed 2026-05-25 19:53 UTC · model grok-4.3

classification 💻 cs.CR
keywords Lightning NetworkBlockchain scalabilityColoured coinsLAppsMicro-paymentsSecurities settlementLegal challengesCryptocurrency applications
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0 comments X

The pith

Lightning Network removes blockchain transaction delays to enable fast non-monetary uses such as securities settlement and micro-payment business models.

A machine-rendered reading of the paper's core claim, the machinery that carries it, and where it could break.

The paper investigates how Lightning Network technology supports instantaneous cryptocurrency transfers that overcome the latency built into blockchain systems. It examines the resulting possibilities for settling coloured coins including securities and for building new applications and payment models based on microchannels. The analysis also addresses legal obstacles that could slow adoption. A reader would care because the work maps a path from slow blockchain transactions to broader practical uses beyond simple currency movement.

Core claim

Lightning Network eliminates blockchain's transaction latency impediment by facilitating instantaneous transfers of cryptos, enabling non-monetary usage in settlement of coloured coins such as securities as well as creation of new business models based on LApps and microchannel payments and micro-trades, while legal challenges may act as impediments to adoption.

What carries the argument

Lightning Network (LN), a layer that routes instantaneous off-chain transfers to bypass blockchain latency limits.

If this is right

  • Coloured coins such as securities can be settled through LN channels without blockchain delays.
  • New LApps can be built around microchannel payments and micro-trades.
  • Legal and regulatory issues around LN use must be resolved for adoption to proceed.
  • Interoperability and scalability problems inherited from blockchain are addressed at the transfer layer.

Where Pith is reading between the lines

These are editorial extensions of the paper, not claims the author makes directly.

  • Existing payment rails in traditional finance might face competition from LN-based micro-trade systems if legal barriers are cleared.
  • Developers could test LN channel capacity limits by attempting small-scale securities settlement pilots.
  • Market adoption rates of LN for non-currency uses would indicate whether the technical fix translates into actual business models.

Load-bearing premise

Technical ability to make fast transfers will produce workable non-monetary applications and business models without major practical or adoption barriers.

What would settle it

Widespread deployment of LN channels for settling securities trades or clear absence of any such channels after several years of LN availability.

read the original abstract

Following in the footsteps of pioneer Bitcoin, many altcoins as well as coloured coins have been being developed and merchandised adopting blockchain as the core enabling technology. However, since interoperability and scalability, due to high and capped (in particular cases) transaction latency are deep-rooted in the architecture of blockchain technology, they are by default inherited in any blockchain based applications. Lightning Network (LN) is one of the supporting technologies developed to eliminate this impediment of blockchain technology by facilitating instantaneous transfers of cryptos. Since the potentials of LN is still relatively unknown, this paper investigates the current states of development along with possible non-monetary usage of LN, especially in settlement coloured coins such as securities, as well as creation of new business models based on Lightning Applications (LApps) and microchannel payments as well as micro-trades. The legal challenges that may act as impediment to the adoption of LN is also discussed.

Editorial analysis

A structured set of objections, weighed in public.

Desk editor's note, referee report, simulated authors' rebuttal, and a circularity audit. Tearing a paper down is the easy half of reading it; the pith above is the substance, this is the friction.

Referee Report

0 major / 2 minor

Summary. The manuscript investigates the technological capabilities of the Lightning Network (LN) to overcome blockchain transaction latency, surveys its current development state, explores possible non-monetary applications (particularly settlement of coloured coins such as securities), discusses creation of new business models via Lightning Applications (LApps) and microchannel payments/micro-trades, and addresses legal challenges that may impede adoption.

Significance. As an exploratory discussion paper rather than an empirical or formal study, the manuscript's value lies in mapping potential extensions of LN beyond monetary transfers and flagging legal considerations. No machine-checked proofs, reproducible code, or falsifiable predictions are offered, but the framing as an investigation of 'possible' usages avoids overclaiming translation from technical capability to viable applications.

minor comments (2)
  1. [Abstract] Abstract: the phrase 'investigates the current states of development' is not matched by any explicit methodology, data sources, or selection criteria in the provided text; adding a brief methods paragraph would clarify scope.
  2. The manuscript would benefit from explicit citations to specific LN implementation reports or legal analyses when listing challenges, to allow readers to trace claims.

Simulated Author's Rebuttal

0 responses · 0 unresolved

We thank the referee for the positive assessment of our exploratory discussion paper and the recommendation of minor revision. The report provides a clear summary of the manuscript's scope but lists no specific major comments requiring response.

Circularity Check

0 steps flagged

No significant circularity

full rationale

The manuscript is an exploratory survey paper discussing technological, legal, and market potentials of Lightning Network applications. It contains no equations, fitted parameters, derivations, or predictions that could reduce to inputs by construction. Claims are framed as investigations of 'possible' usages rather than asserted derivations. No self-citations function as load-bearing premises for any central result. The paper is self-contained as a high-level discussion without circular structure.

Axiom & Free-Parameter Ledger

0 free parameters · 0 axioms · 0 invented entities

This is a survey and discussion paper on LN potentials with no technical derivations, data fitting, or new postulates; therefore no free parameters, axioms, or invented entities are present in the provided abstract.

pith-pipeline@v0.9.0 · 5686 in / 1057 out tokens · 30873 ms · 2026-05-25T19:53:04.687559+00:00 · methodology

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Reference graph

Works this paper leans on

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