For Bitcoin’s solution to scalability, the Lightning Network, 2019 was a pretty good year. Developers made huge progress in allowing massive sums of cash to transfer across the network, the first major exchange integration occurred, and the first Lightning conference was held. “Huge milestones,” according to Ryan Gentry, lead analyst at MultiCoin Capital, a crypto investment firm. Still, 2020 will be the best year yet for Bitcoin and the Lightning Network, here’s why:
First things first, what exactly is the Lightning Network? The Lightning Network is Bitcoin’s answer to the issue of scalability. It’s a second layer payment protocol that functions on top of an existing blockchain and cryptocurrency like Bitcoin. This enables faster transactions among participating nodes than the Bitcoin network can provide on its own.
“This is a very exciting time for Lightning,” said Samson Mow, chief strategy officer at Blockstream, a Canadian blockchain services provider . “For 2020, I expect to see continued growth of the network and further privacy improvements as well.”
Making Lightning payments is becoming simpler, with developers anticipating progress on multi-path payments in the near future. This will enable multiple channels to be used together, so payments can be split up into smaller amounts. This will ensure that large amounts of Bitcoin can be transferred quickly, and cheaply.
Channel capacity is also likely to increase, with the Wumbo channels supposedly already in development. These would leave those participating in a transaction to set the channel limit as high as they want to (rather than the 0.167 BTC it experiences at the moment).
Trampoline routing should also enable clients to make their transactions on a trampoline node (to relay payments), rather than doing it themselves, manually.
It’s likely that 2020 will also see more exchanges adding support for the Lightning Network. Bitfinex has already jumped on board, and Bitfinex wallets can now send and receive Bitcoin over the Lightning Network. In February 2019, Jack Dorsey (CEO of Square and Twitter), announced that Square’s Cash App will onboard the Lightning Network’s capabilities at some point in the near future. Dorsey has also recently contributed to funding the development of the Lightning Network – clearly he’s a fan.
Messaging functionality is reportedly in development too. A P2P, instant messaging protocol, was created for the Lightning Network in November. “Whatsat” will enable encrypted messages to be sent without the involvement of a third party (like Facebook or Whatsapp). There’s also a Lightning ATM in the works that will allow you to convert your spare cash into Bitcoin IRL.
Admittedly, the only hope of achieving mass adoption is by sorting out some of it’s issues (and quickly). Currently, it’s not being used by many of the Bitcoin community – but that could all change in a heartbeat. 2020 will be the best year yet for Bitcoin and the Lightning network, as long as it continues on the path that it’s been on. With the Bitcoin halving around the corner, the protocol can’t afford to falter. Bringing fast and cheap transactions will be more necessary than ever, so here’s hoping that the Lighting Network can keep up.
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