Can the Lightning Network Lead to “Hyperbitcoinization”?
I spent the last week at the Bitcoin Lounge nestled cozily amid the Free State Project’s annual Porcfest in New Hampshire—named for the Porcupine, the libertarian mascot, and located just 7 miles from the infamous Bretton Woods as the crow flies.
As we enjoyed the mild New Hampshire summer, people wandered over to buy $2 sodas with Bitcoin, paying instantly and with zero transaction fee. I watched patient bitcoiners explain the Lightning network to newbies, taking them from zero to a Lightning wallet full of fresh hot “satoshis” in literally 5 minutes. It was the iconic “buy a coffee with Bitcoin” on steroids.
Lightning’s Exponential Dawn
It was an on-the-ground confirmation of what the statistics are already saying: the Lightning Network has arrived. Confirmation that the Bitcoin developer ecosystem has now built the holy grail: Bitcoin as a true medium of exchange. One where transfers are instant, essentially free, and as easy to use as the simplest app on your phone, whether Uber, Venmo, or Twitter.
In fact, our sats party in New Hampshire replicated what’s now going on across the world. Just last week at El Salvador’s now-famous Bitcoin Beach, 20,000 near-instant transactions went around with aggregate fees of $4.98. One-fortieth of a penny per transaction. For perspective, that’s about 500 times cheaper than the credit card fee on a $5 cappuccino, and it’s at least 4,000 times cheaper than the average credit card transaction fee.
Note, 1/40 of a penny would cover essentially any amount—you could buy a house with Lightning for 1/40 penny. It transfers instantly, 24/7 including holidays, and is able to leap national borders and regulatory gatekeepers with zero effort. Try all that with your visa card.
These aren’t just anomalies; Lightning Network statistics have exploded since May, with network capacity now expanding by an annualized 635%. As these new Lightning apps onboard millions of people, these then pass along and train newbies by word-of-mouth, creating exponential growth that can very quickly go from irrelevant to dominant. Inventor Ray Kurzweil once said “in any exponential process, 1% is half-way there.” Lightning Network has hit the expo
Article from Mises Wire