There has been a lot of discussion in the cryptocommunity regarding the Lightning Network and the unique capabilities it will provide Bitcoin users. This off-chain solution, though still in its Beta testing stages, has been hailed by many as BTC’s best scalability option. The Lightning Network is already seeing growing adoption within the crypto space. Let’s take a moment to discuss why the Lightning Network will also help BTC’s market value.
In Satoshi’s Whitepaper, he clearly states that BTC is a “Peer-to-Peer electronic cash system.” To fulfill this promise, BTC needs to be able to handle large amounts of transactions without delays and large transaction fees. In its current state, the BTC blockchain is unable to meet these requirements.
BTC Transaction Fees and Delays
BTC users have been experiencing record high transaction fees ever since the blockchain became congested in early 2017. These fees were the direct result of massive adoption. The BTC blockchain is unable to handle a large number of transactions promptly. BTC’s 1MB block size only allows for seven transactions a second. The LN would allow BTC to handle thousands of transactions a second. The improved transaction processing power is critical in forwarding BTC’s adoption.
As with all cryptocurrencies, BTC’s price depends heavily on the demand for BTC and the amount currently in use. Last year was a break-out year for BTC. The original cryptocurrency became a household name thanks to a combination of positive media coverage and rising demand. In turn, this caused the price of BTC to spike. Bitcoin saw an all-time high of $19,340 on December 6th, 2017.
Why the Lightning Network Will Help BTC Price
The Lightning Network could help BTC regain lost ground in the marketplace. BTC has already had to give up around 20% of its market share to accommodate for new altcoins such as Bitcoin Cash. Bitcoin Cash, a hard fork of the original BTC, is in the top five cryptocurrencies regarding market value.
Hard Forks Could Be In Trouble
Hard forks such as Bitcoin Cash (BCH) possess a large following, but many are simply BTC with a larger block size to accommodate more transactions. The return of fast and affordable BTC transaction is sure to cut into BTC clones such as BCH. It is hard to see BCH retaining its large market share once BTC fees are cheaper and quicker. The Lightning Network could enable a huge portion of the hard fork community to return their investment capital into BTC.
Developers are Pushing LN Capabilities to the Max
Developers need to be onboard with your crypto project if you intend to be successful. Thankfully, the LN has a large developer following. Developers are starting to introduce a plethora of Lapps even with the protocol still in its Beta testing stages. Users can now experience the LN first hand at platforms such as Satoshi’s Place and Lightning Spin.
The Lightning Network will help to push BTC adoption to the next level by providing users with more functionality. The LN gives BTC a myriad of new capabilities including the ability to use Smart Contracts. MIT has been quietly developing these capabilities and others for over a year now.
Altcoins such as Ethereum have benefited greatly from the use of smart contracts, and the addition to the BTC network is sure to fuel further development in the Lapps section. All of this added activity should lead to a spike in BTC’s market value.
It is important to remember that there are less than four million BTC left to mine. This scarcity, combined with the LN’s added functionalities, will give BTC a real opportunity to regain lost market share. It’s easy to see how a flood of new BTC users could drive BTC back towards large-scale adoption. For now, the LN is moving forward at an impressive rate and the BTC community is closely monitoring its developments.
What do you guys think? Will the Lightning Network help BTC regain lost market share? Let us know in the comments below.