In the cryptocurrency market, there have been real debates in the past about how Bitcoin will scale. Would it be better to increase the block size allowing Bitcoin to send transactions faster and cheaper? Or would it be better to keep the block size small, instead of focusing on security and scaling via layers built on top of Bitcoin? The Bitcoin development community decided on the latter option, and the layer 2, Lightning network, became the most popular choice to make that happen.
Lightning allows Bitcoin to send transactions nearly instantly, and almost free. If its adoption increases, it has the potential to process over 1 million transactions per second. A technical feat that would allow Bitcoin to scale large enough that it could be used for transactions of everyday items all over the world. Far surpassing the capabilities of companies like Visa.
It all sounds great, and Bitcoin has all the tools that it needs to succeed. However, the truth is that the Lightning network initially has been slow to gain adoption. In fact, it had become a joke in the crypto industry whenever Bitcoiners would explain that Lightning would allow BTC to scale. Most considered it to be a dead and forgotten project.
The period of time that changed everything was when Jack Mallers began his company, Strike, a lightning payments company that can be used to send remittance payments for nearly free. He heavily pushed this project in El Salvador, and it gained enough traction that even the President of El Salvador began noticing. Eventually, this led to the country making Bitcoin legal tender in the country, and they would be using Lightning to make this feasible.
All of a sudden Lightning was back on everyone’s mind and it had its first true test. While there were admittedly some growing pains, it also wasn’t a failure as well. This led to much more development and focus coming to the Lightning network.
But still, it wasn’t getting the attention or adoption around the crypto market that it deserved. The biggest exchanges like Coinbase or Binance still hadn’t implemented it yet. And all of the brightest developers were working on other blockchains.
Then, the next heavily debated event took place in the Bitcoin market. Ordinals and BRC20. Suddenly Bitcoin had a use case other than just HODLing. The demand for block space had risen to the point that it caused fees to skyrocket. This was important for three reasons.
The first is that reminded people why Lightning is needed. This caused Binance to already announce that they will be implementing Lightning into their exchange in the near future.
The second is that this could be the fix for Bitcoin’s biggest point of failure. The largest FUD thrown toward Bitcoin is that there won’t be any incentive to mine BTC in the future as the mining reward continues to decrease. Up until now, miners were also paid transaction fees, but since Bitcoin was cheap these were next to nothing. However, for the first time transaction fees have surpassed newly mined Bitcoin. This could be lifesaving for BTC.
Finally, the third reason is that this has brought the developers back to Bitcoin. People are interested in it again and want to build with it.
The lightning network has a growing list of supporters with superb resumes. There are the likes of Jack Dorsey, Jack Mallers, Michael Saylor and the list goes on. However, it was just announced at the Bitcoin conference that the former president of PayPal has now “dedicated” his life to working on Bitcoin Lightning.
I have talked for a while about the importance of not only growing popularity through adoption but also how important it is to have “high-power” supporters as well. On a weekly basis, it seems that the Lightning network is being better understood, and also gaining more supporters. This is why the Lightning Network will succeed. Once it does, Bitcoin will be able to fully scale.
How about you? Do you think the Bitcoin Lightning network will succeed?
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