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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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Ricardo Salinas Pliego: Bitcoin “Should Be Part Of Every Investor’s Portfolio”

Mexico’s third wealthiest billionaire according to Forbes is a Bitcoin fan. Ricardo Salinas Pliego sure did his homework, and he’s here to make you see the light. The billionaire recently announced that he holds 10% of his portfolio in Bitcoin. Why? Salinas Pliego knows a few of the reasons that make BTC the soundest money that the world has ever seen.

The subtitled video arrives via podcaster Anthony Pompliano, who says, “Incredible to see this from @RicardoBSalinas given his historic wealth and success.”

If you can speak Spanish and have eight minutes to spare, the original video comes from José Pimpo’s YouTube channel.

Related Reading | The Wall between US and Mexico May Work out Well for Bitcoin

The Reason Bitcoin Should Be Part Of Your Portfolio

According to Michael Saylor, you have to invest at least 100 hours studying Bitcoin before you start to get it. His Mexican counterpart here, Salinas Pliego, evidently put in the time. About Bitcoin, he says:

“I’ve invested a lot of time studying it, and I think that it’s an asset that should be part of every investor’s portfolio. It’s a valuable asset, with international value, that’s traded with enormous liquidity at a global level. And that’s reason enough for it to be part of any portfolio. Period.”

Those are important reasons, but not something that can’t be said about the Dollar. The US’s currency holds international value and you can exchange it with ease for local money in any market. However…

What Does Salinas PliegoThink About Fiat Currencies?

The facts are the facts, money printing and inflation devalue the purchasing power of all the holders. There are no two ways about that. Or, as Salinas Pliego puts it:

“Fiat is a fraud. I started my professional career in ‘81. The Peso was at 20 x 1 (USD.) Today, we are at 20.000 x 1. That’s all there’s to know. And that’s here in Mexico, because if we look at Venezuela, Argentina, or Zimbawe, the numbers loose all proportion. The fraud of fiat is something inherent to the fiat system, and we’re watching it happen in the USA. The monetary emission went to the moon, you understand. The Dollar as hard money is a joke.”

It’s worth noting that in 1993, Mexico phased out the Peso (MXP) and introduced the Nuevo Peso (MXN, “New Peso”.) One MXN is worth one thousand MXP. So, Salinas Pliego’s numbers are correct. 

Also, notice the casual mention of the “went to the moon” meme. This man clearly studies the crypto sphere.

Why Is Ethereum Not A Valid Store Of Value?

Sorry, Vitalik fans. Ethereum has many qualities, but being a store of value isn’t one. Salinas Pliego puts it in simple words:

“Bitcoin’s finite supply, the 21 million, that’s the key of the whole thing. That’s what I was saying about Ethereum. As long as they don’t have a finite supply, I don’t believe them at all. For all I know, they emit more and your asset depreciates.”

And yes, when the EIP 1559 proposal comes into effect, Ethereum will burn some ETH after every transaction. Still, the daily issuance will be much higher than the daily burns. And there’ll not be a hard cap.

Related Reading | Bitreserve adds Bitpeso and Bitrupee to Support 8 Currencies

Who Is Ricardo Salinas Pliego, Anyway?

For a quick profile, we’ll pass the mic to Forbes:

  • Ricardo Salinas Pliego runs the number two Mexican TV broadcaster, TV Azteca, and retailer Grupo Elektra.

  • His Grupo Elektra targets lower middle class consumers who borrow money from his banking arm, Banco Azteca, to buy items at Elektra stores.

  • Elektra, which is publicly traded, was founded in the 1950s by Ricardo’s grandfather, Hugo Salinas Rocha.

  • Salinas appointed a new CEO to TV Azteca in January 2021, replacing his son, Benjamin Salinas Sada, who he’d appointed in 2015.

Among the world’s billionaires, Salinas Pliego is currently at #166 according to the same magazine.

BTCUSD price chart for 06/27/2021 - TradingView

BTC price chart on Bittrex | Source: BTC/USD on TradingView.com
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Treasury Management Firm Says CFOs Avoid Risk, Bitcoin Won’t Become Corporate Vehicle

If you need reassurance on just how early you’re to Bitcoin, head to Fortune.com. They interviewed the managing director of Treasury Partners, Jerry Klein, to find out if corporations are thinking about Bitcoin as a store of value. Short answer, “Not one of our clients has expressed interest in Bitcoin.” Good to know. But let’s explore further.

Related Reading | Stone Ridge’s 10k Bitcoin Bet Shows Changing Sentiment of Corporate America

The article begins with alliteration and dishonesty:

“The lead cryptocurrency so far offers practically no practical uses.”

Is the implication here that, for example, instantaneous wealth transfer is not practical enough? We consulted the linked article to find out exactly what the author meant. It starts with:

“In reality, Bitcoin has flopped as a vehicle for buying things, and it failed in its first big test as a safe harbor during the past year’s stock market crash.”

Oh yeah? Let’s ask the people with strong hands that held on to their Bitcoin until today. Are they not satisfied with Bitcoin’s performance? There’s turbulence, but the harbor is safe. And about the other point. nobody wants to be the next person who pays 10.000 BTC for two pizzas. Bitcoin is and will be in price discovery phase for the foreseeable future. Buying things with it is not a priority.

BTC Price chart, the last year - TradingView

BTC price chart for the last year on KuCoin | Source: BTC/USDT on TradingView.com

But let’s get back to corporate cash

According to Klein, his client’s portfolios usually consist of three kinds of investments: government bonds, money-market funds, and corporate stocks. Klein claims that their priorities are safety and liquidity, and that risk is out of the question. Furthermore, the article continues, “companies want to avoid owning assets that risk even the slightest decline in value.” 

Oh yeah? Isn’t Fiat currency in the United States devaluing at a 15% annual rate? Doesn’t that pose a risk of its own? To drive the point home, let’s quote the pioneer of displaying Bitcoin in the company’s balance sheet. MicroStrategy’s CEO Michael Saylor recently told Time magazine: 

“If you’re going to make a rational investment decision today, whether you’re a real estate investor, a stock investor, a bond investor, or just a wage earner or you’re a treasurer, you have to estimate the rate of monetary expansion for the next eight years. We know there’s a commitment to run deficits, and we know this commitment to stimulus.”

That means the US government is printing money like there’s no tomorrow. And will be for the foreseeable future. 

Related Reading | This is why all companies should buy Bitcoin, says Square’s CFO

You’re early to Bitcoin

Among the crypto community, there is a fear that the arrival of MicroStrategy, Square, and Tesla means that it’s corporations time. That the head-start that Bitcoin gave to the little people is over. Fortune.com’s attitude while handling the subject suggests that the crypto community might be wrong. Big institutions have no idea what’s going on. You probably have more time to stack those Sats. 

And that is a good thing.

Featured Image by Josh Hild on Unsplash - Charts by: TradingView