Liquid Network’s Six Differences Between Liquid and Lightning

Liquid Network introduced article which compares two different, but complementary, layer-2 solutions for Bitcoin: the Lightning Network and the Liquid Network.

Each of these networks has different applications. Lightning is optimised for use in retail, allowing merchants to receive micro to small-sized payments from customers cheaply and quickly. Liquid is primarily a tool for traders and exchanges looking to transfer large amounts of bitcoin (or other tokens) quickly and privately.

They examine six key differences between Liquid and Lightning, and how each network is optimized for different use cases.

1. Transaction Size

2. On- and Off-Ramps

3. Speed

4. Privacy

5. Custody

6. Trust Model

The Lightning and Liquid Networks are complementary layer-2 solutions that allow Bitcoin to be used for a greater range of applications, and by a greater number of people. Naturally there are trade-offs to be made when utilising any layer-2 solution, so it is important to understand the use cases for which each is appropriate, and when it is best to stick to on-chain Bitcoin transactions.

The Lightning Network provides an excellent means for making small transactions quickly and cheaply, where the very high levels of security provided by on-chain transactions is not required. Typically, this will be in applications such as retail and gaming.

Liquid allows for medium to large Bitcoin transactions to be undertaken with a high degree of confidentiality and security, and a reasonable degree of speed. This makes it suited to trading and lending applications.

For users wanting to take advantage of the unique properties of both Liquid and Lightning it is possible to build Lightning Networks on Liquid, which will allow the sidechain to scale further.

What is Liquid Network?

https://blog.liquid.net/six-differences-between-liquid-and-lightning/