Bitcoin’s Next Frontier: Revolutionizing the Future of Global Transactions
Bitcoin Educator Eric Podwojski explains how a certain innovative technology could help BTC become “the true electronic cash for the world.”
In a thought-provoking Twitter thread from May 15, 2023, Eric Podwojski casts light on Bitcoin’s inherent limitation as a daily currency. He presents Lightning Network as a beacon that could revolutionize Bitcoin, enabling its widespread use as a global electronic cash system.
Podwojski delves deep into the core of Bitcoin, a layer that champions security and decentralization but comes with its share of compromises, notably in micropayments. He remarks on this issue of scalability, a conundrum that Bitcoin’s creator, Satoshi Nakamoto, was already cognizant of in 2009.
In his tweets, Podwojski embarks on a journey back in time, revisiting various attempts to address Bitcoin’s scaling problem between 2011 and 2015. He shines a spotlight on Lightning Network, an innovation proposed by developers Joseph Poon and Thaddeus Dryja in 2015. He mentions attempts to bring their concept to life, including “c-lightning,” “eclair,” and “lnd”.
Podwojski takes us back to 2016 when Poon, Dryja, Elizabeth Stark, and Olaoluwa Osuntokun established Lightning Labs. Their collective goal? To propel the “lnd” implementation forward. He then discusses the challenge of fostering interoperability among various implementations of Lightning Network. The resolution? The introduction of BOLT (Basis of Lightning Technology), a new protocol specification.
Fast-forward to late 2017, and Podwojski celebrates the first actual consumer transaction via Lightning Network, carried out by Alex Bosworth, Head of Lightning Liquidity at Lightning Labs.
By 2023, he reports, the network has expanded exponentially. Over 5,500 BTC, equivalent to over $150 million, now resides within the network.
Podwojski talks about the exponential growth in the number of Lightning nodes, from a mere 100 in 2018 to over 18,000 by 2023. Each new node, he notes, enhances the efficiency of the payment system.
In concluding his tweets, Podwojski contemplates the road ahead for both Bitcoin and Lightning Network. He refers to Hal Finney’s 2010 vision of Bitcoin as a reserve currency for banks and Lightning Network enabling efficient digital cash transactions. He highlights recent endeavors by Lightning Labs and Fedi to develop new protocols, reminding his followers that Bitcoin’s design prioritizes security and decentralization and that layers are being constructed atop Bitcoin to tackle the original scaling issue.
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