In this repository we're developing a reference implementation of bitcoin lightning (see: http://lightning.network which proposed the original "lightning network").
The first step was to develop a wire protocol for nodes to talk to each other. The wire protocol is documented in lightning.proto (a protobuf definition file). There are command line utilities to create and process various packets in test-cli.
The second step is to create a daemon which uses that protocol to communicate with others to set up channels and make simple payments. This also involves monitoring the blockchain for transactions. This is where development is currently occurring.
Later steps will enhance the protocol to network individual daemons, advertize their IP addresses, publish routes and fees, and use that information to pay specific nodes. These details are currently being hashed out on the mailing list and the IRC channel #lightning-dev on Freenode.
The protocol requires features not currently in bitcoin, so by default it runs on top of the sidechain Elements Alpha. It can be tested with bitcoin (on testnet) with OP_NOP substitution, at the top level Makefile.
Final note: This is very much a testbed and work in progress; expect All The Things to change, all the time.
Welcome aboard!
Rusty.