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Lightning Speed: Eight Mind-blowing Facts About The Lightning Network

Welcome to “Lightning Speed,” a new section in which NewsBTC will explore the possibilities that Bitcoin’s Lightning Network opens. In this first edition, we will focus on Peter St Onge’s “The Lightning Network is About to Change the World” article. According to his bio, the academic “holds a Ph.D. in Economics from George Mason University, and a B.A. in Economics and Political Science from McGill University.” Make of that what you will. 

St Onge was at the Free State Project’s Porcfest in New Hampshire when he had an epiphany. “The Lightning Network is now moving Bitcoin exponentially closer to becoming a true universal medium of exchange that is controlled by the people, not by governments.” That’s right. Bitcoin already won the store of value race, but, with the Lightning Network, it becomes the apex medium of exchange. What does this mean for the world?

Lightning At The Porcfest

Before we blow minds, let’s explore the Free State Project’s Porcfest real quick. St Onge sets the stage:

“As we enjoyed the mild New Hampshire summer, people wandered over to buy $2 sodas with Bitcoin, paying instantly and with zero transaction fee. I watched patient bitcoiners onboard Lightning newbies, taking them from zero to a Lightning wallet full of fresh hot sats in literally 5 minutes. It was the iconic “buy a coffee with Bitcoin” on steroids.”

Yes, #LightningNetwork is being used at #PorcFest2021. Ana sold a water to @jfcarpio as @Joe_Saz watches pic.twitter.com/sUou8otfP4

— Patrick Motorist (@BitcoinMotorist) June 27, 2021

This was before everybody and their grandmothers went to Bitcoin Beach to test the Lightning Network first hand. Watching the transaction’s speed and comfort, St Onge knew. This was “Confirmation that the Bitcoin developer ecosystem has now built the holy grail: Bitcoin as a true medium of exchange. One where transfers are instant, essentially free, and as easy to use as the simplest app on your phone.”

St Onge’s Four Insights About The LN As A Medium Of Exchange

  • The fees are really that cheap. St Onge recalls, “our sats party replicated what’s now going on across the world. Just last week at El Salvador’s now-famous Bitcoin Beach, 20,000 near-instant transactions went around with aggregate fees of $4.98. One-fortieth of a penny per transaction.” 
  • Traditional banking can’t compete. “For perspective, that’s about 500 times cheaper than the credit card fee on a $5 cappucino, and it’s at least 4,000 times cheaper than the average credit card transaction fee.”
  • It gets better. The fees are not correlated to the transaction’s total amount. “Note, 1/40 of a penny would cover essentially any amount — you could buy a house with Lightning for 1/40 penny.” 
  • The Lightning Network doesn’t sleep. “It transfers instantly, 24/7 including holidays, and is able to leap national borders and regulatory gatekeepers with zero effort.”

BTC price chart for 12/04/2021 on Tradestation | Source: BTC/USD on TradingView.com
St Onge’s Four Insights About The Lightning Network’s Growth & Potential

  • The network is growing exponentially. “Lightning Network statistics have exploded since May, with network capacity now expanding by an annualized 635%. As these new Lightning apps onboard millions of people, they then pass along and train newbies by word-of-mouth, creating exponential growth that can very quickly go from irrelevant to dominant.” 
  • The project has been years in the making. “The original Lightning Network White Paper came out in 2015, and after heady growth through 2019, the Network was essentially moribund these past 2 years.”
  • Most altcoins are no longer needed. “First, it knocks the legs out of competing “medium of exchange” (MOE) coins like Dogecoin, Bcash, Ripple, Litecoin, or their many knock-offs.” 
  • This is just the beginning. “Just as the internet needed user-friendly interfaces (web browsers) before it could really change the world, Bitcoin needed user-friendly interfaces to grow beyond money and towards being the base layer — the “rails” — for decentralized services built on Bitcoin alone.”

The Lightning Network is changing the world already. Because of that fact, NewsBTC created “Lightning Speed,” a feature about the possibilities that Bitcoin’s Lightning Network opens.

Featured Image: jplenio on Pixabay | Charts by TradingView

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Are The Lightning Network ’s Almost-Free Transactions The Killer App BTC Needed?

Bitcoin is already a success story like no other. Will the Lightning Network ’s cheap transactions take the party to the next level? As our exploration of this new technology proceeds, we turn our heads to the ideas of Peter St Onge. Through his newsletter CryptoEconomy, he tells us about the Porcfest in New Hampshire. There, attendees transacted using the Lightning Network all through the festivities.

Related Reading | How Big Is Bitcoin’s Lightning Network? The Answer Will Surprise You

“It was on-the-ground confirmation of what the statistics are already saying: the Lightning Network has arrived. Confirmation that the Bitcoin developer ecosystem has now built the holy grail: Bitcoin as a true medium of exchange. One where transfers are instant, essentially free, and as easy to use as the simplest app on your phone, whether Uber, Venmo, or Twitter.”

An accurate description of where the Lightning Network is right now. However, we’re here to explore another idea of his. In “How Cheap Lightning Changes the World,” St Onge tells us:

“Millennia of inventions show they don’t begin to change the world until they get cheap. Implying Bitcoin’s disruption of the real world hasn’t even begun, and Lightning Network can take it there, from the narrow “digital gold” of today to something revolutionary on the order of agriculture, the printing press, or the internet itself.”

Are the Lightning Network ‘s almost-free transactions what’s going to take Bitcoin to the “something revolutionary” level? That’s the case we’re here to make.

The Lightning Network Solves Problems On The Cheap

To complete the “something revolutionary” idea, the author gives us this tenet:

“It’s not invention that matters, it’s diffusion. For example, steam engines were invented in the 1st century AD by Heron of Alexandria, then forgotten for roughly 1,500 years until independently rediscovered, launching the single biggest transformation since the invention of agriculture.”

To change the world, an invention has to solve problems and be cheap enough for the effort to make sense. “The benefits of the solution have to exceed the costs of the solution.” Cheap technology solves exponentially more problems than an expensive one. So, Peter St Onge is tankful for the Lightning Network ‘s “magical, world-changing, revolutionary cheapness.”

BTC price chart on Bitbay | Source: BTC/USD on TradingView.com
Potential Applications For Microtransactions

According to the author, the Lightning Network could be useful for:

  • “Trading things that are valuable in aggregate, but too cheap on their own.“
  • Trading “things that are very valuable individually but that are currently either too expensive to trade or that face regulatory barriers.”
  • Plus, “Lightning could build uncensorable speech platforms, even uncensorable commerce of physical things.”

Related Reading | Bitcoin Lightning Network Sees Storm Of Activity And Adoption

Also, “there are millions of failed or obsolete business plans through the ages that are viable with sufficiently low transaction costs,” according to Peter St Onge. The author closes his prediction with a rather large time window for it:

“And, to be fair, we’re not talking an overnight revolution; Lightning is growing fast, but probably still has years to reach scale. So I have no idea if we’re talking 2 years or 20 years. But neither should be surprising.

Still, in aggregate, I think microtransactions have the ability to finally unlock Bitcoin’s potential far beyond money.”

His point remains, the Lightning Network ‘s usage is cheap enough and user-friendly enough to potentially onboard the next billion Bitcoin users. And the party is just starting.

Let’s finish this with a phenomenal video in two parts that shows how the Lightning Network ’s been under attack, but persisted and conquered:

(PART 2) pic.twitter.com/gTwsqSLaUb

— ₿ Isaiah⚡️ (@BitcoinIsaiah) August 24, 2021

Featured Image by TheDigitalWay from Pixabay – Charts by TradingView