What is Lightning Network and is it a future opportunity for Bitcoin?

DEvf...JzWR

18 Jan 2024

Discussions on inscriptions have been heated recently. The rise and fall of brc20 has invigorated the market. Some people are making money and others are losing money. No one knows that Bitcoin ecology and inscription will be the focus of the future of the encryption market. It is just a meme trend and will return to zero after that.
It is not a dream for 100,000 usdt to seize the opportunity of Inscription, and those who miss the opportunity are too late to catch up; there are also some players who want to play but do not know whether they should continue to follow, and are not sure whether Inscription will continue to be out of the circle?
btc pay
I don’t know the future market direction, so it tries within the scope of what it can afford to lose, but it ends up doubling instead of returning to zero. Stud may bring huge profits, but if it returns to zero, it will also lose its principal.
In the Bitcoin ecosystem, the Lightning Network and related protocols may also need to be understood. This article does not include fomo inscriptions, but let’s learn the knowledge points of the Bitcoin Lightning Network and Bitcoin L2.
Different token data of Inscription Ecology
①What is Lightning Network?
Lightning Network is a Bitcoin Layer 2 solution that uses a peer-to-peer system to make small payments of cryptocurrency through a two-way payment channel network without the need to entrust funds, helping users save costs and improve efficiency.
Lightning Network is a Bitcoin off-chain payment protocol that solves Bitcoin’s scalability issues. At present, the number of Lightning Network nodes has reached more than 14,000, and the Lightning Network capacity exceeds 5,000 BTC.
Lightning Network is a second-layer protocol, which is an off-chain transaction that does not need to be recorded on the blockchain. It eliminates the need for mining, increases transaction speed, saves gas fees, and expands the number of transactions.
Imagine that the residents of El Salvador buy a biscuit on the street, drink a cup of coffee, pay using the Lightning Network, and complete the transaction in an instant.
Commonly used Bitcoin Lightning Network payment wallets include Strike, Phoenix, Blue Wallet, and Chivo.
Bitcoin Lightning Network Payments
②What are Stacks?
Stacks is Bitcoin Layer 2 that can use smart contracts. The Lightning Network is a peer-to-peer network for payments. Stacks is an L2 chain that can be used for the construction of smart contracts.
Stacks has a separate ledger to store data outside of Bitcoin L1, and developers can build any application on top of it. Any protocol that can be built on Ethereum can also run on Stacks L2s.
With continued discussions and technical investment in the Bitcoin ecosystem, the smart contract layer brings infrastructure for on-chain construction.
For example, defi protocols on the Bitcoin chain, such as Alex, Velar Protocol, Arkadiko Protocol, etc., various protocols on the Bitcoin chain can also become active, and you can pay attention to these projects and their related tokens in advance.
Stacks ecosystem
③What is Taproot and Taproot Assets protocol?
Taproot is a soft fork upgrade of the Bitcoin protocol in 2021. Taproot introduces the Tapscript scripting language;
This script allows for the writing of “simple code” that brings more flexibility and utility to the Bitcoin network, such as applications on Inscription and Taproot Assets.
Taproot Assets is an asset issuance protocol developed by Bitcoin layer 2 infrastructure developer Lightning Labs that enables the issuance of digital assets on the Bitcoin blockchain. These assets can be traded through traditional Bitcoin or using Lightning The network’s off-chain transactions are transferred.
For example, the recently popular NostrAssets project is a permissionless and trustless relay network that seamlessly integrates Taproot assets and Bitcoin into the Nostr ecosystem, allowing users to send, receive and trade digital assets on NostrAssets. , also allows developers to build more practical programs.
Some time ago, NostrAssets airdropped TREAT and TRICK to early users, and is currently issuing airdrops to ORDI holders.
Issuing NFT assets on the Bitcoin chain
Satoshi Nakamoto wrote in the white paper that Bitcoin is a peer-to-peer electronic cash system. However, due to the large price fluctuations and high transfer costs of Bitcoin, Bitcoin has always been used as a way to invest and store assets.
The promotion and development of the Lightning Network makes it possible to pay with Bitcoin. Through Lightning payment, the transfer speed is fast and the gas fee is low, and point-to-point payment is realized. It realizes Satoshi Nakamoto’s original idea of an electronic cash system and is the “transfer of Bitcoin payment”. original intention”.
As the next Bitcoin halving approaches, and mining profits are halved, the exploration of other transaction methods on the Bitcoin chain continues.
Recently, the price of NFT on the Bitcoin chain has skyrocketed. The floor price is 0.36 BTC, more than 15,000 US dollars, which is more than a quarter of the value of BTC. I wonder if NFT on the Ethereum chain will become popular in the BTC ecosystem again?
Bitfrog’s current floor price is 0.36BTC
The skyrocketing price of BRC20 has also attracted more people to pay attention to Bitcoin Inscription and ecology. Although there are many discussions about whether Inscription is a meme and creates garbage on the chain, no one can say whether Inscription is a future opportunity.
More exploration will promote the development of the Bitcoin ecosystem. If the gameplay on the Bitcoin chain is diversified, whether all public chains will bloom, or the Bitcoin ecosystem will be dominated by one, and the waiting time will be revealed.
The above is just my personal opinion, no investment advice. I am CryptoLola, and I am paying attention to the encryption market and web3.

6

Lightningnetwork
Btc
Stacks

6

Follow