Samson Mow is feeling very confident about the Lightning Network. While the Blocksteam chief strategy officer seemingly spends most of his time posting travel pics on Twitter—he’s also a keen watcher of bitcoin, and in particular, the Lightning Network, aka the layer-two scaling solution. 

In an exclusive interview with Decrypt, the long-time Bitcoin veteran told us why the underlying tech powering Lightning could be just as pivotal to help deliver better scalability to a whole host of tokenized digital assets out in the wild today, not just bitcoin.

“[I’m] very bullish on the lightning network” Mow said. At its core, the Lightning Network is a decentralized system for instant and high-volume Bitcoin micropayments—with payments as low as 1 satoshi (worth $0.0001)—being able to be confirmed for low, if any transaction fees. 

Bitcoin transactions, on the other hand, can sometimes take an hour to be confirmed. The layer two scaling network, is regarded as one of the key ways Bitcoin will be able to support millions of payments and users per day.

There are two main ways to look at the project, says Mow. First, as a layer two scaling solution for the Bitcoin network, and second, as a standalone technology that can be leveraged by other blockchains or digital asset protocols. And he’s excited for “both its implications for Bitcoin and the technology itself for other applications.” 

Much like Bitcoin did itself, Mow said, “Lightning has to grow organically, there’s no real way to jumpstart it artificially. People need to open up channels, lock up Bitcoins and start connecting with other nodes.”

And it appears that people are taking up the Network in droves. Last week, the number of nodes on the network hit the symbolic 10,000 mark, with network capacity now also at 816 bitcoin’s—or $6.8 million if the capacity is measured in US-dollars. 

To put that in perspective, the network capacity is eight times larger than it was a year ago (worth $750,000 back then)–it hit a high of $12 million or 1,100 Bitcoins in July this year. 

The growth of the Network “has been pretty spectacular given that it’s only a year and a little bit old—it’s still very, very early,” explained Mow.

However, he told us, “Lightning is going to become harder and harder to track its growth.”

Want the best of crypto news straight into your inbox?

Mow explained that back in 2018, the network was being continuously data mined by research companies who were looking to compile data about nodes and users’ IP addresses. This data could then be potentially sold to advertisers or more nefarious clientele. Earlier this year, Blockstream engineer Jonas Nick tweeted he’d been “contacted by multiple (research) organizations” asking whether he collected Lighting network data—and if they could potentially make use of it.

As a result, says Mow, “we now have private channels.” While that’s good for users it means it’s harder to track growth of the network. “Right now we’ve seen a drop in Lightning channels, but it’s not really a drop, it’s just more channels are now going private”.

Despite Mow’s bullishness over the Lighting Network’s growth over the last 12 months, he did share some concerns about how the network can scale longer term. To test the network, he told us how Blockstream had initiated a project that created a million Lightning channels to stress the network to its full capacity 

Mow said that Blockstream “found that there was work needed to be done—but overall I think we’re on the right track.”

Despite the ability to scale to a million channels–the network currently shows 35,500 public channels—he said that: “We’re well ahead of the growth curve and demand for Lightning usage at this time”.

Lighting to scale other blockchains 

Apart from just being used to scale payments on the Bitcoin network, Mow also explained how the technology behind the Lightning Network can also be applied to scale other networks. Last month Samson’s firm announced its plans to utilize the technology to scale transactions on Blockstream’s own blockchain—named the Liquid Network. 

Mow explained that “with Liquid, you can have a Lightning Network running on top of Liquid assets”. By this he means that by utilizing the specific routing technology behind the Lighting network—the technology could be used to scale transactions for other blockchain-based assets. Examples include Litecoin or even specific assets that could be issued on top of Blocksteam’s Liquid Network

The Blockstream CSO went on to explain that “it could jump-start a new paradigm for tokenized digital assets that can be issued on a centralized network—but then be distributed around the world and transacted freely—peer-to-peer over a Lightning Network.”

In this sense, he called the technology “simply amazing”—adding that “when you look at applications of the tech, you could do away with almost every point system that’s currently in play in the world today.”

Does Bitcoin need it?

Some have argued that as Bitcoin’s roadmap progresses, the need for layer two solutions like Lightning would diminish. Mow disagrees. The scaling success for blockchains has proven to be “with off-chain technologies” rather than on-chain scaling solutions. He said that he thinks that people have come to the realization that on-chain scaling–at least with bigger blocks–“does not really work”. Sorry Bitcoin Cash. 

However, Mow said that with Bitcoin’s current 4mb equivalent blocks (through SegWit transactions), “improved fee estimation algorithms” and the “next Bitcoin halving looming on the horizon and another one in four years time”—that the current block size may actually be too “too big”.

But as long as the Lighting network and BTC backed side-chains can pick up some of the slack in years to come, “I think we’re okay with dealing with capacity and being able to use Bitcoin as a medium of exchange”.

Who needs the Lighting Network after all then. 

(Excerpt) Read more Here | 2019-10-06 13:06:00
Image credit: source

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.