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Has Bitcoins Lightning Network Failed

Has Bitcoins Lightning Network Failed

Has Bitcoins Lightning Network Failed? before this article begins I would just like to once again remind everyone that right now ledger wallets are running their Black Friday sale for this week only you can get a 30 discount on all ledger devices on the website including The Legend of X for the first time first time they happen theyve had a sale there so if youre interested in a securely store in your crypto phones be sure and check it out and ideally please use my affiliate link down below Id appreciate that very very much ok now I said the way we can get onto the subject matter of this article today and as we as the your kind of draws to a close now were gonna get all reflective right its gonna be a lot of looking back and the question were gonna be discussing today is has the lightning Network failed has it been a flop so far the reason Im saying this is because I remember back in 2018 thinking about the year 2019 many people including myself probably now and again talked about how this year could be the year of the Lightning Network and so I thought we were taking a look to see where we are now that were approaching the end of this year ok and this was actually inspired by another tweet from Spencer Noonan who I featured in my dphi article the other day so wasp ensign who said about it was a choral decrypt or Twitter 2019 was supposed to be the year of Lightning Network it wasnt why does everyone think the little light network hasnt seen more eruption and Ill just quickly say as well cuz I made and I ran a poll on Twitter the other day talking about should I explain these things very very briefly what is the Lightning Network its a second layer scaling solution that runs on top of Bitcoin right so its not directly in the layer itself as I can application or protocol that sits on top of the kind of first layer protocol of Bitcoin that allows for cheap very fast transactions and its a way to scale a Bitcoin network because on the kind of native protocol level youve got maybe like 7.5 transactions per second light and network in theory would help you to scale that to an almost infinite level right this is a kind of tradeoffs around security and whatnot but generally allows for scaling on a layer that sits on top of Bitcoin so lets actually take a look at some of these figures and were gonna use a resource called Bitcoin visuals to kind of measure all this stuff and so one thing Ill bring up first is the number of nodes running on there and you can see where theyve marked the year kind of 2019 theres been some growth especially kind of springsummer time what looks like but things have remained relatively flat now flatlining it are a small picture in front of me now but it looks like about well somewhere between four and six thousand oh its maybe like four point five thousand nodes and its not really youre not seeing a whole lot of growth beyond that okay we kind of peaked out for now and it looks like its just kind of plateau and its an even slightly more than negative outlook if you look at the number of channels as well so once again I make this nice and larger number of channels running on the Lightning Network you reached a peak at what looks like again kind of maybe springsummer time of 2019 where you had more than 40, 000 channels at any given one time and things are actually reduced a fair amount since then weve gone back below 40, 000 I would guess maybe like somewhere between 35 and 40 thousand channels youre seeing actually a kind of prolonged steady decrease in the number of channels which isnt the kind of thing that we want to be witnessing right we want to see sure but steady growth if anything or ideally more kind of parabolic growth thats certainly not the case here and one final metric Ill just show you as well in terms of the network capacity which is the cumulative Bitcoin capacity across all channels so how many Bitcoin are actually stored on like a network like now and you can see kind of like with a previous chart that we reach some kind of peak at one point there was just over a thousand Bitcoin total network capacity that was worth at the time more than just over ten million dollars but now that number is reduced back below a thousand Bitcoin and if you combine that with a kind of price decrease in Bitcoin as well youre looking at serve 10 million dollars on the entire Lightning Network which when you consider the kind of market cap in a bulb in the billions for Bitcoin its um its not great I think its I think its fair to say that these numbers are disappointing to say the least or this isnt the kind of thing we would like to have seen in my deal scenario would have seen a lot of steady growth throughout the year and ideally a lot more than you know serve 10 million dollar capacity the entire network and so what Im gonna do with the rest this article now is just provide my own personal Pena again in a bit financial advice of answering the question and tight of this article does this mean the line of network has failed and what Ill say straight up is that no I dont believe its actually failed to do so I think this is in hindsight with the benefit of hindsight more or less what should be expected and the reason why is because this actually fits in with where Bitcoin is in terms of development as money in terms of development when it comes to looking at adoption because what I think a rational person looking at the space right now would think to themselves is its very clear theres a lot more adoption that we all hope to see with Bitcoin right now weve reached about one maybe 2 max of kind of Internet users so far have been exposed to Bitcoin and have actually bought and user so theres still a whopping vast vast majority of the population that we want to kind of penetrate right and so what they would think to themselves is clearly theres a lot more adoption at play still to go and so because of that is likely to be much more drastic potential for price appreciation a Bitcoin because the more adoption you care because a little kind of limited supply that would have to lead to a higher price it makes much more sense for the a rational person just hold on to the Bitcoin they have right the kind of holder mentality and wait for price appreciation before they would even think to dispose of their coins and use it as some kind of medium of exchange where they want to dump their Bitcoin for something else where thats groceries with us drinks at a bar whatever it just makes sense to huddle right this also goes back to kind of monetary economic principles like Greshams law and tiers law if youre not familiar with those feel free to check on my course where I explain it all but essentially you know people are rational actors once again Im just going to choose the hot lot or something that they think is likely to either preserve or increase in value before theyre likely to spend it theyre gonna always ought to spend or dispose of something else before the kind of precious thing that they expect to appreciate and value over the long term there are also issues around volatility would help to explain why Bitcoin and lightning Network isnt used currently sim eutteum exchange and thats because right now the market camp is so small again going back to the fact that we dont have enough adoption yet there because its so small theres just so much volatility that Bitcoin can never be used like fiat currency could never be used as a reliable mean of exchange because people businesses tend to crave that kind of relative stability right or they want to avoid volatility whenever they can and so in that sense again its much more helpful for it right now to just be treated as a store of value to have a lot more money a lot more liquidity and to the space and once you get much much larger more significant market cap with tons more liquidity then at that point the kind of law of large numbers will come into effect and be much more difficult to have these kind of injections of volatility that we see right now were right now in 2019 weve had what I call these Bart patterns where you know price will be relatively flat yourself a gigantic shoot upwards and then flat and then a shoot downwards thats just not practical for everyday payments but when you have turns more when you get into the trillions of dollars worth of market cap itll be much much harder to see those kind of patterns youll have a much more flat stable price which once again kind of lien itself at that point towards being more reliably used as a currency being used as a peertopeer cash as a medium of exchange and so going back to the question of the kind of lack of adoption with light in networks so far and whether or not so disappointment as it feels completely my answer would just be that I think Lightning Network is exactly where it should be at this point taken into account the size of the market cap right now and the level of adoption across the entire population its just my personal opinion that the Lightning Network will never ever take off until we have much larger market cap much more adoption and until that point it makes far more sense for the average rational person to huddle to hold onto their Bitcoin and see and witness that rapid price appreciation get some interesting adoption before ever thinking to dispose of it or to use large portions of it to just buy groceries and drinks at a bar thats nonsensical to me and I think its nonsensical to many other people out there and so thats why again Im part of that kind of BTC small bucket crowd I just say you know what lets just treat Bitcoin its digital gold for now let the market cap rise into the trillions allow enough liquidity to enter the system and then at some point in several years from now when were at that point well also have allowed the Lightning Network to about many many years to improve the technology get it ready for mainstream adoption because this is all still completely experimental right now and people have lost the small amounts of Bitcoin that have been put into at times so I think everything works perfectly if we just treat it as store value for now wait for the technology itself to kind of refine improve ready for mainstream adoption and all things should come together kind of synergistically and beautifully several years from now now is not the time for lightning Network to be used by large portions of the Bitcoin network and so thats it youve heard what Ive out to say about the Lightning Network as Ive been disappointing yes but actually to some degree this should be expected and I think its far far too soon for lightning there were two could be considered a failure I think its doing exactly what it should be considering where we are in terms of the overall development and adoption of Bitcoin so youve heard what Ive got to say at this point I would like to now kind of hand the microphone over to you so to speak I would love to know in the comments section down below what you think about the levels of lightning Network adoption so far Bitcoin adoption just generally what your kind of vision for the the future of lightning and Bitcoin is you a fan of the Lightning Network you were severe skeptic you very critical of it you prefer Bitcoin cash in on train scaling and bsv whatever youre thinking please hope you know in the comment section down below get a sudra like if you enjoyed it subscribe run dance already once again if you want to check out the daily percent discount on ledger nanodevices if you want to secure your funds you can do so by following my affiliate link right down below Bigler thank you all so much those of you who have done that already so far it means a will to me and of course if you want to learn how to buy store and sell crypto currencies like Bitcoin for the first time then you can check out my completely free course down below as well thank you all so much for watching Ill be back with more articles very very soon Cheers

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