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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 [BTC] will take another 22 years to regain its all-time high, says research analyst

Akash Anand

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'Bitcoin [BTC] will take another 22 years to regain its all-time high', says research analyst
Source: Pixabay

Bitcoin [BTC]’s rise and fall has been a consistent event that has grabbed headlines in the cryptocurrency space. According to the latest financial analysis conducted by UBS research analyst Kevin Dennean, the fans of the cryptocurrency will have to wait for over 22 years to climb back to its earlier heights of $19,000- $20,000.

Dennean made these claims comparing the pattern of Bitcoin and the cryptosphere with the trends of other financial system crashes like the Dow Jones crash of 1929, the NASDAQ slide in 2000 and the Oil tumble of 2008. The UBS analyst pointed to how a lot of the cryptocurrency’s proponents stated that Bitcoin is en route to a bull surge because ‘other assets did that in the past’. He laid the foundation for the delayed rise of Bitcoin by saying:

“We’re struck by how long it took other asset bubbles to recover their peak levels (as long as 22 years for the Dow Jones Industrials) and how pedestrian the annualized returns from trough to the recovery often are.”

Dennean was also of the opinion that not every bubble that bursts recovers its old highs, taking the example of the Nikkei crash, which after 30 years of its fall, has still not managed to reach its earlier peak, currently trading at around half its all-time highs. The Japanese asset price bubble was an inflated economic bubble in the late 80s where the real estate and the stock market prices were greatly volatile. In 1992, the price bubble burst and Japan’s economic machine came to a standstill.



Another figure used by Dennean was the fact that all the asset classes, including Bitcoin, fell by 75 percent with Bitcoin breaching the 80 percent barrier. After the crash, only the Dow Jones and the NASDAQ provided a reprieve to users after rising back to its earlier highs.

At the time of writing, Bitcoin was trading for $5292 with a market cap of $93.423 million. The 24-hour trading volume was clocked at $12.985.





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