Crypto markets have often been criticized on their ability to create a cryptocurrency and value it based on the project’s utility. These altcoins are faster and provides more solutions than Bitcoin can. Nevertheless, there are hundreds of them. Moreover, they do not provide the decentralization that Bitcoin offers.
However, Bitcoins transactions are limited by average block time of 10 minutes; scalability issues. In the real world it could never hope to become a currency in it’s current state. However, if one were to use Blockchain as a basis, the CTO of Blockstream, Samson Mow claims,
…if you really understand how blockchains work, the technology is actually not very conducive to fast transactions because the network needs to keep in sync.
Lightning and Liquid Network
The extensiveness of the Bitcoin network at the moment has fortified the value system of Bitcoin. According to Mow, leveraging Bitcoin’s network, Liquid and Lightning Network (LN) could induce privacy, scalability and speed to BTC transactions.
Moreover, one of the most interesting aspects of the two solutions on Bitcoin is an absence of a new ‘crypto.’
The liquid network is already working as a side-chain for USDT and BTC. The total USDT authorized on Liquid chain is only 0.3%, nonetheless, it is greater than EOS. He wrote,
“Liquid is a Bitcoin side-chain, and what that means is—it’s a blockchain that does not have a its own native currency, it still has Bitcoin but in another format called Liquid Bitcoin (L-BTC).”
Furthermore, the Lightning Network (LN) is not a ‘blockchain per se’ but a network which provides instant almost free transactions.
“I guess the easiest way to conceptualize it for the average person is by comparing it to a bar tab.” He added, “Lightning is similarly just aggregating transactions; you open a channel with someone and you can route through that channel.”
Mow explains the difference between the two and emphasizes that both are important. While Lightning is providing a settlement layer for payments, Liquid is more oriented towards Exchanges and Financial Services Industry.
Views of only Bitcoin Maximalist?
Mow has often been criticized for working on side chain solutions while shaming projects like Ethereum and almost all altcoins in the process. Altcoin believers suspect hypocrisy in his views.
However, the solutions provided are P2P and most importantly skips the cryptocurrency bit. Hence, there is less incentive and opportunity for manipulation. The community with exchanges, users and other developers could decide on growing and using the solutions.
Blockstream is currently working on Liquid and also providing support to Lightning Labs in building LN.
Do you think the future of payments will be on Bitcoin, altcoin or a FIAT? Please share your views with us.