Bitcoin developers propose hierarchical channels to boost lightning network scability

With hierarchical channels, Lightning may overcome its scalability limitations by enabling quick and flexible off-chain resizing of channels.

Developers are exploring the use of hierarchical channels to help speed up and make the Lightning Network (LN) more scalable. Hierarchical channels allow for flexible off-chain resizing of channels, enabling quick and cheap resizing, without on-chain transactions which add delays and costs. In contrast, resizing channels on-chain can cause delays of several months and increases fees. The current proposals for resizing channels off-chain involve creating a channel factory or CoinPool and exchanging capacity between channels within the same factory or pool. Hierarchical channels allow for flexible off-chain resizing of channels without requiring an exchange of capacity within a limited pool of users. The hierarchical channels enable the creation of a two-party channel with two main outputs, one per party, plus zero or more Hashed Time-Locked Contract (HTLC) outputs.

(Credits : BTCCasey)