THELOGICALINDIAN - n-a
The Lightning Network is declared to fix Bitcoin’s apathetic affairs and aerial fees, but so far it’s acquired as abounding problems as it solved. Luckily, there’s addition cryptocurrency cat-and-mouse to booty up the slack.
The abstraction of application Litecoin as an accessible onramp to Lightning payments is not new. As Charlie Lee tweeted beforehand this summer:
The abstraction of Litecoin as “silver to Bitcoin’s gold,” has collapsed out of favor as Mr. Lee’s admire diminished. But for a cardinal of reasons, not alone is Litecoin a acceptable contender, it may be Lightning’s alone aisle to adoption.
Lightning Still Throws Sparks
Before we get beneath the hood, let’s recall how the agent works. The Lightning Network is the band-aid to Bitcoin’s apathetic blocks and aerial fees, which accomplish accustomed spending impractical. While some cryptos accept explored added scaling solutions, the Lightning Network is an barter of instant, peer-to-peer IOUs, which makes it reasonable to use Bitcoin to buy a sandwich.
Although Crypto Briefing has poked affable fun the Lightning Network’s, acquisition problems and bugs, these are problems that able developers can eventually solve.
But there are a few problems that can’t be solved, because they are inherent to the Lightning Network’s design. One is that there’s no way to absolutely escape transaction fees: although Lightning affairs are acutely cheap, you still accept to pay a approved Bitcoin fee to accessible and abutting your channels.
By one calculation, it takes sixteen affairs afore Lightning is cheaper than Bitcoin Cash, with commensurable abstracts for other altcoins That’s a lot of sandwiches.
The additional botheration is that Lightning channels are not secure, and accordingly clashing for ample volumes. Lest we be accused of exaggerating, actuality it is in the words of Andreas Antonopoulos, one of Lightning’s best respected advocates:
There is a aegis risk. That arrangement will accept keys on it, so it is a hot wallet. And if you’re active that hot wallet with lots of bitcoin on it again it’s a ambition for attack, and addition can drudge into your bulge and use it to cesspool your wallet.
So the aftereffect is article a bit like a Rewards card. You ability put a few dollars in a Starbucks agenda to save a few percent on coffee. But you wouldn’t put added than a ten or twenty, in case you lose the card; and you’d be crazy to put added than a hundred.
At the time of writing, the boilerplate Lightning approach had a accommodation about $59.
But it takes sixteen lattes to get your money’s worth, and you can’t top up as you go. While some maximalists ability appetite the adventure of Lightning for Bitcoin’s sake, best of us accept abundant agitation application a regular crypto wallet.
Big and Small Transactions, but not Medium Ones
The aftereffect is that Lightning is a ablaze solution, but for the amiss problem.
At present, Bitcoin is a acceptable way to accomplish a hundred-dollar transaction, and through the Lightning Network can additionally avenue a hundred altered one-dollar transactions. But it’s not a abundant band-aid for medium-sized or exceptional transactions, except among accurate believers.
Which is area Litecoin comes in.
Since the Lightning Network launched in mid-March, Bitcoin fees averaged at about a dollar, although they beneath as prices fell. The red band adhering the X-Axis is the boilerplate fee for Litecoin, which never exceeded 0.21 cents.
That’s a apple of difference, abnormally to the accidental users to whom “mass adoption” refers. No rational amateur is activity to absorb a dollar to open/close a Lightning channel, unless they’re very frequent users. A Lightning approach with Litecoin, on the added hand, could be adjourned with ten or alike bristles dollars, and amount beneath than what you’d leave in the tip-jar.
The aftereffect is a bill that fills up all the holes in the crypto-economy: not alone for macro- and micro-transactions, but additionally accustomed expenses. In crypto as able-bodied as in absolute life, silver, not gold, is the best aqueduct of electricity.
The columnist is not invested in Litecoin, but does own Bitcoin and Bitcoin Cash.
