This month has been a roller coaster ride of highs and lows for crypto investors. This volatility was brought on by a combination of factors. One could argue that Tesla's Chief Executive Officer, Elon Musk, was a major influencing factor on these market movements. His latest posts have put a spotlight on Bitcoin's primary scaling solution, the Lightning Network.
The outspoken tech advocate sent Bitcoin prices soaring after investing $1.5 billion into the world's first cryptocurrency earlier in the year. These gains pushed the entire market cap to new heights. Bitcoin and other major projects achieved new market highs as part of this bull run. However, the market took a sharp turn after Musk shared some critical concerns about the coin.
Specifically, Musk Tweeted that he would walk back his earlier assertion that Tesla would accept Bitcoin as payment. Then, he shared a graph of the coin's power consumption that he described as “insane.” These comments shook investors as $500 billion was wiped from the market following the comment.
Elon Musk Does His Homework
Recognizing that his Tweets had a major effect on the market, and the fact that the losses hurt Tesla's holdings, Musk went back to the social media sphere to make some vital clarifications. First, he quelled the rumors that Tesla was going to dump its billions in Bitcoin. Now, he has taken the next step and done his research into scalability options. Like most Bitcoiners, this journey has led him to the Lightning Network.
Musk shared some insight into his discovery process as he explained that “Bitcoin hashing (aka mining) energy usage is starting to exceed that of medium-sized countries.” He went on to discuss how small hashers are washed away in the economics of the network in this structure. Notably, to alleviate these concerns, he recommended the implementation of the Lightning Network.
Musk also spoke on the vital role decentralization plays in the economy. He stated that the concept of achieving true decentralization was “noble.” He then went described the current state of layer count and its reliance on bandwidth before noting that a single layer protocol may be able to accomplish the same goals in the future.
Elon Musk Continues His Crypto Search
In recent posts, Musk has also helped promote other projects in the crypto market. Specifically, he has been a vital component in the recent surge in Dogecoin's market cap. Currently, he is exploring other blockchains that provide a more eco-friendly design. This research could lead to Musk lending a helping hand in more than one network. His participation in the Lightning Network could drive development to new heights.
It’s Time to Light Things Up
Currently, the Lightning Network enables Bitcoin users to send millions in Bitcoin in seconds globally. Comparingly, Bitcoin's mainnet requires an average of 14 minutes during normal congestion. These transaction times have been delayed recently due to scalability issues. Additionally, the Lightning Network is way cheaper to utilize.
You can send a global payment using the network for around one Satoshi. That’s way less than a penny. The same transaction on Bitcoin's network averages around $14. When you scale these payments up in both frequency and amount, you can see where the Lightning Network has the capabilities to change the game.
Musk Is Ready to Ride the Lightning
Hopefully, these latest developments are a sign that one of the world's most eccentric billionaires and tech personalities is ready to dive into the Lightning Network. There is no doubt that Tesla could benefit from the micro-transaction capabilities of the Lightning Network. For now, the entire crypto market is just happy Musk has restrained his criticisms and has begun his search for solutions.