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Bitcoin [BTC]’s Lightning Network scales transaction fees down to $0.049 for 42 transactions?

Anirudh VK

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Bitcoin [BTC]'s Lightning Network scales transaction fees down to $0.049 for 42 transactions?
Source: Unsplash

The scalability argument has been relevant in the Bitcoin community ever since the network gained popularity. A potential solution to this problem was the introduction of the Lightning Network.

The Lightning Network is a solution built on top of the Bitcoin blockchain that allows for instant, high-volume micropayments. Even as the transaction speed for Bitcoin sits at an average of 7 transactions per second, the Lightning Network scales the potential of the blockchain to transact in milliseconds to seconds.

The solution allows for users to open a payment channel between the sender and the receiver, which can then conduct an unlimited number of transactions. Upon the channel being closed, all the transactions are broadcast to the blockchain. It utilizes smart contracts to conduct transactions at “million to billions of transactions per second”.

A post on Reddit showed how efficient the Lightning Network is when implemented on the blockchain. User Legitinternetguy said:

“So far I’ve made 42 transactions on Lightning Network, and it has cost me 600 sat (channel open) and about 120 sat in routing fees. total of 720 sat, or 4.9 cents. Virtually no other alt-coin can compete with these costs.”

This was accompanied with an image of the aforementioned transactions, providing an opportunity for Bitcoin to become the peer-to-peer cash system that it aimed to be in the beginning.

The technology also allows for cross-chain atomic swaps to occur off-chain. This can be achieved using heterogeneous consensus rules. These may result in the creation of true decentralized exchanges without 3rd party custodians as they exist today.

Redditors rejoiced at the potential cost-savings of the network, with user Hanspanzer saying:

“5 cents for 42 tx is negligible as well and bitcoins network is by far the biggest and proven to be robust.”

Comparing it to Nano, user Legitinternetguy said:

“Not while keeping same level of decentralization. Also Nano cant scale to Lightning level, LN could theoretically handle around 3.5 million transactions per second today.”

User Hanspanzer praised the Lightning Network, saying:

“the fees that gonna be saved will stack to an enormous amount. this is wealth creation in action.”





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Anirudh VK is a full-time journalist at AMBCrypto. He has a passion for writing and interest towards the future of blockchain technology and cryptocurrencies. He does not own any cryptocurrencies currently.

Bitcoin

Bitcoin will likely be valued at $100,000 with a market cap of over $2 trillion before the end of 2021

Priya

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Bitcoin [BTC] will likely reach $100,000 with a market cap of over $2 trillion before the end of 2021
Source: Unsplash

The entire cryptocurrency market seems to be on the brighter side of the market since the beginning of the year. A majority of the coins have recorded significant recoveries from their 2018 slump, a period during which most coins lost over 90 percent of their value, when compared to their all-time highs. Among all the coins in the market, Bitcoin [BTC] aka the digital gold, was noted to be making a massive comeback as the coin breached the $11,000 mark after nearly 15 months. The coin however, soon retracted to settle below the $11,000 level.

According to CoinMarketCap, at press time, Bitcoin was trading at $10,887.27 with a market cap of $93.549 billion. The coin recorded a 24-hour trading volume of $20.757 billion for the past 24 hours and saw a massive rise of over 17 percent over the past seven days.

Anthony Pompliano, Co-founder of Morgan Creek Digital Assets, predicted that the largest digital currency could rise to reach $100,000, before the end of 2021. Pomp added that he was around 70-75 percent confident in this prediction. He stated,

“As I have previously said, making predictions is difficult […] Part of my process as a professional money manager is forming a thesis (price target), identifying a timeline (date), and establishing a confidence level. And then constantly re-evaluating those three aspects of my thought process as I receive new information.”

Pomp however, listed six pointers that have to be understood beforehand. First, this prediction is not an investment advice, and people should do their own research before investing in the digital currency. The second is with respect to Bitcoin’s volatility, with Pomp remarking that since it was a highly volatile market, the coin could witness a significant fall before being valued at $100,000. He stated,

“I anticipate that there will be numerous 20-30% drawdowns from new all-time highs as the asset continues to appreciate in value. These mini-boom/bust cycles should not cause panic, but rather need to be understood as natural market dynamics whenever an asset gains significant value in short periods of time.”

Further, the partner of the investment firm stated that the rise would be driven by several catalysts. This includes institutional adoption, exchange-traded funds and retail product approvals, global instability, governments all across the globe manipulating currencies, markets and economy. He went on to state,

“The market cap of Bitcoin will reach $2+ trillion when Bitcoin is worth $100,000. This is less than 1/3 the market cap of gold and less than 1/40 the global money supply.”





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