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Bitcoin Lightning network is a second layer network not a sidechain, Mastering Bitcoin author

Priya

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Bitcoin Lightning network is a second layer network not a sidechain, Mastering Bitcoin author
Source: Unsplash

Andreas Antonopoulos, the author of Mastering Bitcoin and a well-known Bitcoin proponent spoke about whether the Lightning network is a sidechain or a second layer.

Antonopoulos started by speaking about the Lightning network, stating that is a second layer network and not a sidechain. He elucidated that the second-layer is mechanism for transmitting payments off-chain with the help of the underlying blockchain for security. He stated:

“It allows you to route through payment channels, which are smart contracts using multi-sig and time delays. It allows you to transfer [small amounts of] bitcoin… between two participants, without [needing] to record it on the blockchain [until settlement or there is a dispute].”

The author further added that there is no need for the two participants to trust anyone else. This is because Bitcoin’s underlying technology, blockchain, is the “basis of trust and security”. He continued to say that the Lightning network can also be used as a multi-currency routing network.

Antonopoulos said:

” You can have nodes that are participating in Lightning with Bitcoin, or nodes that run Litecoin. Theoretically you could have nodes that run Ethereum or [other compatible blockchains].”

This was followed by the Bitcoin proponent speaking about the pre-requisites for a blockchain to be Lightning compatible, stating that they are fundamental security functions including multi-sig, time delay and a transaction malleability fix. He stated that with multi-sig and time delay, hashed timelock contract can be implemented, building block for routed payment channels. He said:



“Theoretically, you could use it… to connect side chains to each other. Today, in fact, you can transmit a Lightning payment [with] bitcoin, and the recipient [will get] Litecoin, which is another blockchain, because both of them are Lightning compatible.”

Antonopoulos stated that because of this, Litecoin and Bitcoin have become sidechains of each other, adding that the Lightning Network acting as the smart contract layer that connected them.

Mattfm101, a Youtuber said:

“Lighting is amazing, when the next rally happens people won’t be turned off by the slow transaction speed”





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

Bitcoin

Bitcoin price prediction: BTC prices primed for small correction that could evolve into a major correction

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Bitcoin prices primed for a small correction which could evolve into a major correction
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Bitcoin has been on a parabolic bullish rally for quite a while, which was followed by sideways movement of the price. However, at press time, the pattern formed indicated an imminent correction.

At press time, Bitcoin was priced just below $8,000, i.e., $7,979 and had a market cap of $141 billion. The dominance of Bitcoin had reduced as the rally ceased and stood at 57%.

Descending Triangle Pattern

Source: TradingView

As seen in the chart above, Bitcoin’s prices are enclosed in a continuation pattern, i.e., a descending triangle, which is a bearish pattern for Bitcoin. The volume for the same can also be seen decreasing over the course of the pattern, which affirms the above pattern.

When the pattern unfolds, the price will break out of the pattern and head downward; the only thing stopping the price from dipping is important resistance points. The price is likely to hit $7,820 level after the breakout, however, if the former level fails there are subsequent resistance points at $7,674, $7,529, and $7,256, which will be tested in that particular order.

A possible Double Top in the formation?

The above breakout is a short-term movement of price, however, on a longer time frame, the price is stuck in limbo, which explains the sideways movement. The parabolic rally was quick which is why most prominent traders, including Peter Brandt, Tone Vays, and others, are expecting a correction, that is overdue.

Source: TradingView

In the above chart, the way the price of BTC is moving suggests the possibility of the formation of a double top. However, the pattern is only confirmed after the price breaks the lowest resistance, i.e., $7,529. After which, the price will decline quickly into a correction that is being expected by most of the traders in the crypto space.



There is however a scenario where the price might just take off from here since it’s is undergoing a sideways movement, which can also be treated as an accumulation phase.

Conclusion

Crypto Twitter is quite bullish on Bitcoin and expects it to continue the rally, however, technical analysts and traders are awaiting a correction. According to Tone Vays, the price of Bitcoin will reach $4,500 before proceeding to a bull rally; Peter Brandt is also awaiting a pullback. No matter the outcome, it is better to tread carefully or stick to stacking sats.





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