In this article I will briefly summarize the use of Bitcoin and two (off chain) solutions based on privacy. In addition to Bitcoin, we have two solutions that track its price but have advantages and disadvantages: Lightning Network (Layer2) and eCash (which is a fork of Bitcoin Cash, which in turn is a fork of Bitcoin). I won't dwell on Bitcoin but will focus mainly on the two scalability solutions.

BITCOIN
As you may know, Bitcoin uses a decentralized network of nodes that validate transactions through a consensus mechanism (Proof of Work). Algorithms are solved using energy power that allow transactions to be validated. Once a transaction is recorded on the blockchain, it is practically impossible to modify it, ensuring the integrity of the data. Bitcoin uses cryptographic algorithms to protect private keys and transactions. Transactions are public and visible on the blockchain, which means that anyone can track the movements of Bitcoin by knowing an address. Bitcoin addresses are not directly linked to the identity of users, but it is possible to correlate addresses through analysis of transactions and interactions.

LIGHTNING NETWORK (LAYER2)
Lightning is a Layer2 protocol built on top of Bitcoin, which allows for faster and lower cost transactions (it is more scalable). Since it runs off chain (outside of the Bitcoin blockchain) it is less secure and vastly less decentralized. It essentially uses smart contracts to manage the various payment channels, ensuring that it works. Transactions made on the Lightning Network are not visible on the Bitcoin blockchain, increasing privacy. Transactions between users within a Lightning channel are not public, which means they are harder to trace. Lightning Network channels enable fast, low-cost transactions outside of the Bitcoin blockchain. Two users decide to open a payment channel. To do so, they send a certain amount of Bitcoin to a "multisig address" on the Bitcoin blockchain, which requires both of them to sign in order to use the funds. This is recorded on the blockchain. Once the channel is open, the 2 users can send Satoshi to each other without recording every single transaction on the main blockchain. They can make hundreds or thousands of microtransactions by exchanging balance information instantly and privately. Every time X sends Bitcoin to Y or vice versa, they update the "balance" of the channel. Only the two of them know exactly how the balance in the channel has evolved. As long as the channel is open, transactions only happen between them, without high fees or waiting. When the 2 users decide to close the channel, the last updated balance is recorded on the Bitcoin blockchain. This ensures that both of them receive the correct amount of funds, based on the transactions that have occurred in the channel. Through custodial solutions like Wallet Of Satoshi it is possible to use the network without having to open channels.

ECASH (BITCOIN CASH FORK)
eCash is quite decentralized and is designed to offer more privacy than Bitcoin. It uses technologies such as blind signatures and other techniques to hide the amount and addresses of transactions. It allows for anonymous transactions, meaning that the identities of users are not easily traceable. Users can create and sign eCash transactions offline, using devices that are not connected to the internet. Once a transaction has been signed, it can be physically transferred (for example, via a USB device) to another user or uploaded to an internet-connected device for transmission to the network.
eCash uses advanced cryptography techniques, such as expiring signatures, to ensure that transactions can be validated even in the absence of a continuous connection to the network. After offline transactions are completed, they can be synchronized with the blockchain once the devices are connected to the internet. 1 XEC is worth 100 satoshi. While 1 BTC is divided into 100 million satoshi, in the case of eCash (XEC) we have the value of 100 satoshi.

PAY DIRECTLY ON CHAIN
Remember that you can directly spend your crypto online in exchange for goods and services using Bitrefill. Just register with an anonymous email, add goods, services or vouchers to the cart and then an address is generated where to send the payment (supports BTC, Lightning Network, BNB Chain and almost all major L2). After a few seconds you will have your Amazon voucher, petrol, supermarket, travel, flight reservations, etc. on the site itself. Convenient, safe, fast and no KYC.

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