How Bitcoin Got Struck By Lightning
Scalability has always been a huge concern for Bitcoin users. In fact, when bitcoin was first proposed in a whitepaper by Satoshi Nakamoto back in 2008; this concern was still upheld. Does the Bitcoin Lightning network prove as a solution to this issue?
The Scalability Dilemma
Bitcoin’s lightning network has been quietly scaling for mainstream use for some time now. Many people have been unsure if the Bitcoin Lightning Network is ready for mainstream use.
Since Bitcoin was first released, scalability has always been a cause for concern. Infact, one of the first public comments on the Bitcoin whitepaper also shares this concern. James A. Donald, the first person to publicly give an opinion on Bitcoin stated:
The way I understand your proposal, it does not seem to scale to the required size
10 years since Bitcoin’s launch, scalability is still an issue. So what exactly is scalability? Throughout Bitcoin’s existence, it has only been able to process around 7 transactions per second (TPS). At first, this was more than enough as the bitcoin network was still small. But now, with people transacting large amounts of BTC daily, this is no good for real global adoption.
Over the years, many people in the Bitcoin and cryptocurrency community have come up with hundreds of different proposals with suggestions on how best to improve the scalablity of BTC. Be that as it may, as it stands; an overall resounding consensus is yet surface. This is one of the main reasons we have many different Bitcoin-like networks that branched out from the original Bitcoin network.
However, there has been one solution currently undergoing testing that has the potential to solve this issue. This is the Lightning Network.
The Bitcoin Lightning Network
Once upon a time, the quickest and most efficient method of long-distance communication was to send a telegram. In order to do this, you’d have to go to your local post office and fill out a form. The price you’d pay for a message was entirely dependant on how many letters were in it. From there, they would telegraph the message to the closest telegraph office to your destination. Then, a post man would deliver the telegram to it’s final destination.
Essentially, in order to send a simple short message; many people were involved, and it would cost a pretty penny. This pretty much sums up Bitcoin in its current state. In other words, the Bitcoin Lightning Network is like having someone you talk to on speed-dial. Press 1, and your friends phone instantly starts ringing.
Bitcoin is like gold, a good store of value, more expensive to move. Lightning is like cash, its value is linked to gold, but it’s faster and cheaper to move
– Francois Harris
The Bitcoin Lightning Network adds an additional layer to the Bitcoin blockchain, enabling users to create their own payment channels between two parties. These channels exist for however long they’re required. As they’re only set up between two people, transactions are almost instant, and fees are practically non-existent as they’re so low.
Originally, The Bitcoin Lightning Network was made specifically for Bitcoin (BTC) transactions. However, Lightning Labs is currently working on developing its technology in order for it to support a range of cryptocurrencies. Some of these include; Litecoin (LTC), Ripple, ZCash (ZEC), and Ethereum (ETH).
The Lightning Network has been steadily growing since it’s initial launch. In a community event called “The LN Trust Chain”; people were passed an invoice, told to add a few satoshis then send it on. One of the most popular people to receive this torch was Jack Dorsey, Co-Founder and CEO of Twitter.
Currently, the Bitcoin Lightning Torch holds around 3 Million satoshis (around $100) after only starting out as an experiment. The goal of this experiment was to spread the awareness of the Bitcoin Lightning Network whilst also making sure that it’s robust and works with ease.
Just last month, the Bitcoin Lightning network passed its milestone capacity of over $2 Million worth of bitcoin. It also hit an all-time high capacity of 646 BTC tokens (Approx. $2.2 Million)
The Bitcoin Lightning Network is definitely one of the most promising developments to enter the cryptocurrency space in a while. With instant Bitcoin payments between 2 users, scalability becomes less of a problem as the network grows. Could this be the catalyst for the next jump in Bitcoin’s Valuation?
Have you used the lightning network? If so, what did you use it for? Have you played any LN games? Let us know your thoughts in the comments below!