Earlier today I stumbled across an article about stablecoin transactions coming to the Bitcoin Blockchain. Thinking I might have lost my mind I ignored it before circling back to the article later to see what was up with it. While reading it I was awestruck at the idea and this new frontier for the Lightning Network.
For a while now people have been clamoring for how the Lightning Network was going to improve Bitcoin as it’s a Layer 2 solution. However, much of what was expected has taken longer than most of us thought to develop and implement. Luckily though Lightning Labs, a company that builds applications for the Lightning Network, is getting ready to roll out a new feature I never imagined for Bitcoin to have.
This new feature is possible due to the Taproot upgrade to Bitcoin’s Blockchain some time again and Lightning Labs has given their new protocol a fitting name in Taro! Up until this protocol when you imagined the Bitcoin Blockchain it was dramatically different than the Ethereum Blockchain due to the different tokens that Ethereum offers. While Bitcoin has been and continues to be the golden standard for crypto other blockchains had really been cutting into it due to their offerings.
This allows users to be able to use the Lightning Network to send and receive stablecoins. Since this is pretty standard now with the popular blockchains this will help protect or insulate Bitcoin from this cutting into its popularity. This will help further bank the un or underbanked and allows stablecoins to be sent on a blockchain that is much cheaper than Ethereum.
An important thing that that company addressed that holds up is that even with possible upcoming US stablecoins regulations this DOES NOT affect this product or the protocol. Since Lightning Labs is not issuing a stablecoin but rather creating a way for it to be moved this falls out of the scope of both President Biden’s Executive Order and the proposed legislation in Congress! The focus of these possible rules has been to make sure that the value that is stated is actually backed up. They are not going after the computer code that allows for the transaction to take place.
This type of protocol falls into the same place that current payment networks are trying to get into with VISA, PayPal, Mastercard, and others forming partnerships to be able to benefit from stablecoin or transactions in dollars. I see Lightning Network almost as how Robinhood used to be the new kid on the block with a revolutionary idea that really shakes up the major powers that are currently in place. These developments will force these major players like the ones I listed above to either adapt or slowly fade away.
I am pretty optimistic about seeing this roll out! While I do not see it being a game-changer it provides users with another low-cost option and another chain to send funds on. Decentralization is the future of money and this will go a long way in making sure that it does happen!
Please know I am not a financial advisor I am just someone who picked up on a trend and wanted to express it! Makes sure you always do your own research and never invest money you cannot afford to lose! If you enjoyed this article and would like to further support me below are a couple of referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_
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