When Will The Bitcoin Lightning Network Start Working? By DailyCoin
- The number of lightning networks has grown with the adoption of El Salvador.
- Bitcoin cannot process more than seven transactions per minute, so it is not suitable as a payment method.
- Because transactions on the scaling network process much faster, lightning network could encourage retail adoption.
While good things can take time, too many people in fast-paced cryptocurrency space may be detrimental to their adoption process. Bitcoin evolved into a store for value and attracted attention from tech celebrities like Elon Musk, Michael Saylor, and others.
Bitcoin was designed to enable trustless and censorship resistant P2P transactions. But, due to Bitcoin’s volatility, it could not carry out currency functions. The lightning network allows developers to scale up the transaction capacity on the network.
Faster Than the Speed of Light
Cryptocurrencies are entering a “coming of age” momentum after El Salvador made Bitcoin a legal tender. As a result, Bitcoin’s lightning network channel adoption is going parabolical. The number of channels have increased by 2000 since September 7, totaling 73,000 and accumulating 24,000 BTC.
After publishing $5 transactions with $0 transaction fees, Alex Gladstein demonstrated the effectiveness of the Lightning Network. Moreover, other Twitter (NYSE:) threads show Bitcoin’s Lightning Network efficiency in El Salvador, regardless of people claiming it does not work. In 2021, network capacity increased by two-thirds after an L2 solution was adopted by a country, which funneled in more users.
Adoption isn’t driven by transaction speed or facility. Instead, communal consensus will enlighten users of the benefits of using the Lightning Network to the detriment of Western Union (NYSE:) or even bank transactions. El Salvador can operate as a country-wide test pilot for mass adoption. Jeff Booth, entrepreneur and tech investor, argues that retail can benefit from the Lightning Network and improve profits by 2%-3% by “cutting out Visa (NYSE:).” Moreover, the same presumptions arose after insider reports indicated Amazon (NASDAQ:) could adopt Bitcoin as a payment method.
On The Flipside
- Bitcoin’s volatility hinders the token’s ability to become a used exchange unit.
- Arnhem Bitcoin City data shows that Bitcoin users are much less inclined to use them, despite having a lightning network for payment.
Solutions Vs. The Lightning Network
The Lightning Network is the scaling solution for effortlessly achieving financial sovereignty. But, it raises privacy and security concerns due to its methodological input. Shinobi, host of Block Digest has written an article arguing that the Lightning Network is not limited to interdependence at 2-of-2 multisigadresses. Layer 2 still offers the most viable solution for scaling Bitcoin.
Trust must be built between both transactional parties in order to use the Lightning Network. This requires that users use the same safeguarding principles for centralized services. Although penalty keys are a partial solution, it is not compatible with the fundamental usability standards of using the blockchain to transact.
Mobile phone storage is crucial to optimize the network’s efficiency. Transactions must be saved on mobile. This causes interference with other apps that use space. The user is then forced to either close the Lightning channel, or to pay extra space. It is contrary to its purpose. The Lightning network is facing partial scaling issues while the ANYPREVOUT protocol gets rolled out.
Due to the 10% set-up fee, on-chain fees may impact channel deployment. Users may experience delays in transactions due to high fees. As more users use the network the price floor will rise exponentially. Furthermore, Bitcoin L2 options can lead to the disclosure of personal IP. This is not how blockchain works. Shinobi notes that Tor is the current best way to keep the network secretive. But, Tor’s servers are partially centralized, which creates additional concerns about using the network.
As Bitcoin’s hegemony grows outside institutional debates and becomes used and understood by the mass audience, Lightning Network protocol improvements will be hurried, if and only if there is usage demand from retail consumers and users.
What is the reason you should care?
Although the Lighting Network may have some limitations, it is still a viable solution that is easily accessible and continuously improving. This is a promising sign for the future.
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