Editors Note: This article comes fromHoneycomb Finance Newstext
Editors Note: This article comes from
Honeycomb Finance News
On March 9th, three years after the publication of the Lightning Network white paper, a digital asset wallet application provider launched the Lightning Network function. This is the first application in China to launch a Bitcoin Lightning Network wallet.
Lightning Network (LN) is a second-layer payment protocol attached to the blockchain main chain. It was originally designed to improve the efficiency of Bitcoin transactions and make payments as fast as lightning.
This vision has attracted the attention of geek circles, but in China, its current network capacity is 1.51 BTC, and the number of nodes is 24. The global proportions of the two data are 0.196% and 0.63% respectively, and its presence is low. Some people in the industry believe that the lack of participants is because there is no clear economic benefit.
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Many domestic followers, low sense of presence
One week after the overseas wallet application company Zap held a Lightning Network experience event in China, on March 9, the wallet application company Hoo launched the first domestic Bitcoin Lightning Network wallet, adding a little vitality to the deserted domestic market.
Lightning Network (LN) is a second-layer payment protocol attached to the blockchain main chain. It was originally designed to improve the efficiency of Bitcoin transactions.
Previously at the lightning network experience event, investor Wang Sheng (pseudonym) showed Honeycomb Finance how to use it.
The event attracted hundreds of people. But only a few experienced the payment process. Everyone seems to be more concerned about its impact on the price of Bitcoin. Wang Sheng said that this seems to be a microcosm of the Lightning Network in China: there are many followers, but not many people actually use it and build infrastructure.
The activity of the Lightning Network is mainly reflected in three indicators: the number of nodes, the number of transaction channels, and the network capacity. The more nodes and transaction channels, the more participants; the larger the network capacity, the more funds invested.
According to the lightning network resource monitoring website 1ML, as of March 10, the total network capacity of Chinas lightning network is 1.51 BTC, and the number of nodes is 24. The global proportions of the two data are 0.196% and 0.63%, respectively, and the presence is low. In contrast, the United States, with a capacity of 407 BTC, ranks first in the world, and its number of nodes is 1048, accounting for 27.57% of the global total.
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In 2016, Joseph Poon, chief technology officer of the smart contract trading platform Mirror, published a white paper entitled Bitcoin Lightning Network: Scalable Instant Payments Outside the Chain. For a long time thereafter, the Lightning Network was mainly spread in a small circle among geeks, and did not widely attract the attention of investors.
On January 19, 2019, a Twitter user named hodlonaut launched a #LNTrustChain torch relay campaign, bringing the Lightning Network under the spotlight. He sent 100,000 Satoshi (approximately $3.4) to anyone who replied to his post through the Lightning Network, and then each person who took the torch would add 10 Satoshi and then pass it on to others, until reaching the upper limit of 4.3 million Satoshi on the Lightning Network Finally, it is up to the final holder to donate the funds to charity.
The torch relay set off a wave in the currency circle. Twitter founder Jack Dorsey, Binance founder Zhao Changpeng, and Tron founder Sun Yuchen all became its torch bearers. Up to now, the Lightning Torch has changed hands 231 times and has gone through dozens of countries.
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The current transaction volume of the Bitcoin network can only handle 5 or 6 transactions per second. When catching up with a large number of transactions, it often takes several hours to confirm a block containing multiple transfer records. This has brought obstacles to the commercialization of Bitcoin. The emergence of Lightning Network has allowed practitioners to see the possibility of Bitcoin as a hard currency for daily payment.
It establishes a second-tier transaction network on the basis of the Bitcoin main chain, allowing both parties to trade freely in the off-chain transaction channel. When the channel is closed, the final result will be recorded on the main chain. This means that the transaction data on the second layer network will eventually only have one transaction recorded on the main chain, which greatly reduces the congestion of the original network. But its limited capacity has also virtually set up a ceiling for itself.
According to 1ML data, the current global lightning network capacity is 773 bitcoins. Jiang Zhuoer, CEO of Libit Mining Pool, believes that the Lightning Network is a payment network with a very limited scope of application. Unless there is an extremely centralized Super Lightning Hub, it will not be able to solve the congestion problem of the BTC main chain.
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The capacity of Lightning Network is 773 bitcoins
On the other hand, EOS founder BM has publicly doubted the security of Lightning Network.
BM believes that someone can send a large number of junk transactions to the Bitcoin network, clogging the network, and then causing the Lightning Network channel to time out, resulting in transactions that cannot be synchronized to the block when the channel is closed. This consequence will result in the loss of coins for transaction users.
He told Honeycomb Finance that the cost of building a node is not high. You only need to buy a server and a hard disk with a large storage space, and the cost is within 2,000 yuan. But he suggested, “The technical threshold for building a node is relatively high, and ordinary users don’t need to build it themselves, just use someone else’s node.”
Compared with the global construction of lightning network infrastructure, many domestic media and communities have sparked discussions, but it is a step behind in actual application. Although the cost is not high, Xie Chaoye found that there are still very few people in China who actually participate in it. Because there is no clear commercial value yet.
Wen Hao, the founder of Bitpie Wallet, expressed the same opinion. Domestic enterprises and individuals are more pragmatic. If there is no clear economic benefit, everyone will tend to be slower to follow up on new technologies. But it doesnt mean that Chinese people dont pay attention to it. We will build some Lightning Network nodes in the near future.
Wallet developers: There is still a distance from large-scale commercial use
The economic benefits currently visible in the Lightning Network are transaction fees. This seems to have brought it a wealth effect. From the data point of view, the number of nodes, channels, and total capacity of the Lightning Network have increased almost every day in the past month.
According to 1ML data, as of March 10, there were 7,184 nodes in the Lightning Network, an increase of 19.28% year-on-year. These nodes connected 34,176 channels, an increase of 40.4% year-on-year. The entire network accommodated 773 BTC, equivalent to $3.02 million, an increase of 18% year-on-year.
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The number of nodes, channels, and total capacity of the Lightning Network have increased significantly
However, Wen Hao believes that the current lightning network infrastructure is still far from large-scale commercial application.
According to his analysis, only from the wallet side, most of the current platforms are still in the pseudo-Lightning Network model state. The Lightning Network wallets on the market are all hosted wallets, which are still far from truly decentralized, trustless, and easy-to-use Lightning Network wallets for beginners.
In addition to technology, in China, the uncertainty of the external environment is also a factor that hinders the large-scale commercial use of Lightning Network.
Theoretically, the Lightning Network does solve the problem of Bitcoin being used for small payments. However, when it comes to payment, it will involve supervision. If users trade with Bitcoin in China like legal currency, it will definitely involve supervision. problems.” Xie Chaoye said, “This is also one of the reasons why practitioners cannot see commercial value.”
