Welcome to “Lightning Speed,” a new section in which NewsBTC will explore the possibilities that Bitcoin’s Lightning Network opens. In this first edition, we will focus on Peter St Onge’s “The Lightning Network is about to change the world” article. According to His bio, the academic “holds a Ph.D. in Economics from George Mason University, and a B.A. in Economics and Political Science from McGill University.” Make of that what you will.
St Onge was at the Free State Project’s annual Porcfest in New Hampshire when he had an epiphany. “The Lightning Network is now moving Bitcoin exponentially closer to becoming a true universal medium of exchange that is controlled by the people, not by governments.” That’s right. Bitcoin has already been the store-of-value winner, but with the Lightning Network it will be the ultimate medium of exchange. What does all this mean for the rest of the world?
Lightning at The Porcfest
Before we blow minds, let’s explore the Free State Project’s Porcfest real quick. St Onge is the star of the show:
“As we enjoyed the mild New Hampshire summer, people wandered over to buy $2 sodas with Bitcoin, paying instantly and with zero transaction fee. Watching patient Bitcoiners take their newbies from zero to Lightning wallets full of hot sats took me five minutes. It was the iconic “buy a coffee with Bitcoin” on steroids.”
— Patrick Motorist (@BitcoinMotorist) June 27, 2021
It was long before everyone, including their grandmothers, went to Bitcoin Beach and tried the Lightning Network. Watching the transaction’s speed and comfort, St Onge knew. This was “Confirmation that the Bitcoin developer ecosystem has now built the holy grail: Bitcoin as a true medium of exchange. One where transfers are instant, essentially free, and as easy to use as the simplest app on your phone.”
St Onge’s Four Insights About The LN As A Medium Of Exchange
- These fees really are that affordable. St Onge recalls, “our sats party replicated what’s now going on across the world. Just last week at El Salvador’s now-famous Bitcoin Beach, 20,000 near-instantTransactions were completed with an aggregate fee of $4.98. One-fortieth of a penny per transaction.”
- Traditional banking can’t compete. “For perspective, that’s about 500 times cheaper than the credit card fee on a $5 cappucino, and it’s at least 4,000 times cheaper than the Credit card average transaction fee.”
- This is just the beginning. The fees are not correlated to the transaction’s total amount. “Note, 1/40 of a penny would cover essentially any amount — you could buy a house with Lightning for 1/40 penny.”
- The Lightning Network doesn’t sleep. “It transfers instantly, 24/7 including holidays, and is able to leap national borders and regulatory gatekeepers with zero effort.”
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St Onge’s Four Insights About The Lightning Network’s Growth & Potential
- It is rapidly growing. “Lightning Network statistics have exploded since May, with network capacity now expanding by an Annualized 635%. As these new Lightning apps onboard millions of people, they then pass along and train newbies by word-of-mouth, creating exponential growth that can very quickly go from irrelevant to dominant.”
- It has taken years to create the project. “The original Lightning Network White Paper came out in 2015, and after heady growth through 2019, the Network was essentially moribund these past 2 years.”
- Altcoins no longer need to be used. “First, it knocks the legs out of competing “medium of exchange” (MOE) coins like Dogecoin, Bcash, Ripple, Litecoin, or their many knock-offs.”
- It’s just the beginning. “Just as the internet needed user-friendly interfaces (web browsers) before it could really change the world, Bitcoin needed user-friendly interfaces to grow beyond money and towards being the base layer — the “rails” — for decentralized services built on Bitcoin alone.”
The Lightning Network already has a profound impact on the global economy. NewsBTC created “Lightning Speed” because of that fact, a feature about the possibilities that Bitcoin’s Lightning Network opens.
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