Bitcoin: The Federal Reserve is very interested in the Lightning Network

Bitcoin: The Federal Reserve is very interested in the Lightning Network

Bitcoin + Lightning = global currency? – Unlike the European Central Bank, which mainly sees Bitcoin (BTC) and cryptocurrencies as a riskUS central bankers seem more pragmaticTo not say interested. We thus learn that the Cleveland branch of the Federal Reserve (Fed) commissioned a study on the Lightning Network (LN) of Bitcoin. His conclusion, however, had to give cold sweats to bankers.

Lightning Network ‘turns Bitcoin into currency’

The network Lightning of bitcoin is a second layer solution (layer 2) which helps offload transactions from the BTC mainnet. It is intended more particularly for microtransactions Daily. Indeed, the exchanges of BTC are there instantaneous and almost free.

Enough to arouse curiosity of the Cleveland Regional Branch of the U.S. Central Bank. The latter has recently published a report by researchers who studied impact of the LN network for bitcoin. The result is without appeal on the side efficiency already :

“We demonstrate that use of the Lightning Network is associated with reduced mempool (memory pool) congestion in the Bitcoin ecosystem, as well as lower fees [de transactions]. »

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LN and Bitcoin to oust the US dollar?

More worrying for central bankers, who no doubt seek to gauge the competitor to their precious paper money (the dollar here): the symbiosis between the king of cryptos and its second-layer network could make it into BTC a currency fully functional.

“Our results suggest that the benefits of going off-blockchain [principale] through the Lightning Network can help Bitcoin grow and work better as a means of payment. »

Thus, the researchers explain to Fed officials that the Lightning Network “solves a key technological constraint” of Satoshi Nakamoto’s original Bitcoin. In fact, the period of 10 minutes between each transaction block made the network already infinitely faster than traditional banking transactions.

But this limited its use for daily payments, carried out for the moment with cash or bank cards. With the LN solution, BTC transactions now take less than a second!

Focused on the Lightning network, these analysts do not, however, specify another point that will be necessary for Bitcoin to establish itself as world currency. As the President of Rockefeller Internationalit will also be necessary that the value of BTC “stabilizes in the next 3 to 5 years” to see it supplant the US dollar.

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