The Bitcoin Lightning Network

The Bitcoin blockchain has previously been criticised when it comes to the length of time it takes for a peer-to-peer transaction to execute. Not only that, but these transactions have also been costly when it comes to micropayments. For example, it might have cost $1 to send $10 of btc and taken hours if not days to clear. This is more prevalent in times of high volumes of transactions where the network becomes congested. This congestion causing the slow transactions was the main reason for the hard fork in 2017 that resulted in the creation of Bitcoin Cash. (But whatever you do, don’t call it Bcash). A hard fork has occurred a few times in the Bitcoin lifespan as people or groups of the community attempt to make a better bitcoin. These people lack the foresight that the Bitcoin core will have the exact technological development over time that they are trying to achieve sooner through forking the code and implementing such improvements. Bitcoin cash was attempting to speed up transactions by increasing the block size from 1 MB up to 32 MB. They were hoping that by increasing the block size and enabling faster transactions that it would help from a scaling perspective, particularly in onboarding retail merchants around the globe by voicing fast and cheap transactions for commerce. Meanwhile, Bitcoin core developers were already working on speeding up the protocol by making improvements to the original code. That being the Lighting Network, which is a payment transaction protocol referred to as layer 2. The lightning network sits on top of layer 1, the bitcoin blockchain itself. Transactions are not conducted on the bitcoin blockchain due to high fees and the time taken to transact, rather via the opening of payment channels on the layer 2 lighting network where fees are low, and the payments are “lightning” fast.
Investing in bitcoin superannuation is the best option and not allocating capital to any of the bitcoin forked coins due to the higher risk they present. Bitcoin has endured the test of time and will continue to do so. It has been a different story for the forked coins, in terms of both the decrease in price of the coin and the network usage numbers when compared to Bitcoin core. Generally the forked blockchains are of a more centralised nature, not necessarily the new code but rather the person or community that initiates the fork. Bitcoin core is the only truly decentralised protocol, often referred to as a “gift” from Satoshi as he/her/they no longer have any developmental input or control whatsoever in the direction of Bitcoin. Furthermore, in recent years, the narrative has evolved where Bitcoin is becoming a dominant store of value (SOV) and less reliance or attention placed on its ability for fast and cheap transactions. But the potential to be both a SOV and a fast payment network has bitcoin on the path to mass adoption and global success.


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