• Ark is a new Layer 2 Bitcoin protocol created by 24-year-old Burak Keceli that seeks to solve Lightning Network’s ‘Inbound Liquidity’ problem.
• The Inbound Liquidity problem requires users to commit funds to the protocol even when they’re just receiving payments.
• Ark eliminates the need for a recipient to commit funds, allowing them to receive payments without having committed any funds.
What is the ‘Inbound Liquidity’ Problem?
The Lightning Network’s “inbound liquidity” problem refers to the requirement for users to commit funds in order to receive payments. This means that even if someone just wants to receive payments, they have to first commit funds and make outbound payments in order for their capacity on the network to increase and allow them to receive more bitcoin as payment. This burdensome requirement has led users of the Lightning Network running non-custodial setups quickly realize one thing: The system works more like an abacus than a bank account, with limited space available for incoming transactions.
Introducing Ark
Enter Ark – a new layer 2 Bitcoin protocol created by 24-year-old self-taught Bitcoin developer and researcher Burak Keceli – which seeks to solve this issue by eliminating the need for a recipient to commit funds before being able use the network. According Keceli, this will enable recipients of Lightning Payments – much like those sending them – not have their capacity reduced when receiving bitcoin as payment, thus providing true inbound liquidity on the network.
How Does Ark Work?
Ark proposes creating two distinct types of channels on its layer 2 network – ones with inbound liquidity (IBLC) and ones without it (NBLC). Channels with IBLC are designated specifically so that only one party can send transactions but both parties can receive transactions. Thus, this guarantees that one party will always be able send money while also allowing both parties access inbound liquidity without having committed any funds beforehand.
Why Is This Necessary?
Keceli believes that forcing all users of the Lightning Network into committing funds before using it doesn’t make sense from a practical perspective and should be eliminated if possible. He hopes his creation of Ark will do exactly that – provide true inbound liquidity on Layer 2 networks such as Lightning while still enabling cheaper and faster bitcoin transactions between participants on its own blockchain platform .
Conclusion
In conclusion, Ark is an innovative new layer 2 Bitcoin protocol designed by Burak Keceli which eliminates the need for users who simply want to receive payments on Lightening Networks from having previously committed any funds beforehand. By doing so it provides true inbound liquidity on these networks while still enabling cheaper and faster bitcoin transactions between participants using its own blockchain platform .