What Is A Multi-Path Payment?
A multi-path payment (MPP) is a type of lightning networkWhat Is The Lightning Network? The lightning network is a layer 2 payment protocol that enables near-instant, low-fee, private payments on the Bitcoin network. It is intended to enable scalable,... payment that is broken up into smaller parts to make lightning payments more reliable and private. Since MPP are fragmented, they are more difficult to follow than a single larger payment.
Multi-path payments are atomic meaning that they either all complete successfully or they all fail and the sender is unable to send the payment. MPP are not to be confused with partial payments.
Advantages Of Multi-Path Payments
Multi-path payments provide a series of advantages and benefits such as increasing the reliability of the lightning network, increased privacy, more competitive fees from routing nodes,
Increased Reliability
Before MPP was implemented, sending a lightning payment would require sending through at least one routing node to reach the recipient. This would require every single payment channelWhat Is A Payment Channel? A lightning network payment channel is a specialized smart contract between two lightning nodes that allows for near-instantaneous bitcoin payments between the two nodes with... to have enough liquidity to route the payment. With MPP, users are able to send payments without every single payment channel having a balance greater than the payment amount.
Instead of relying on a single path, MPP enable payments to be fragmented into smaller payments and routed to the
Increased Privacy
Not only do multi-path payments make the lightning network more reliable, they also make lightning payments more private. When a payment is routed through a single path, any given node in the path may be able to learn information about about the payment.
When a payment is divided into smaller payments and routed across multiple paths, it becomes more difficult for any single routing node to know how much the payment amount is for or where it is being sent to since it might not be the entire payment.
More Competitive Fees
Prior to multi-path payments, large-capacity payment channels were the only way to send larger payments on lightning. Since there are fewer large-capacity channels, they are able to charge higher fees.
Splitting payments into smaller pieces and routing them across multiple paths, smaller payment channels are able to route a larger number of payments. This increase in routing options enables smaller channels to compete with larger channels based on fees and connectivity rather than liquidity.