Lightning Network is the second-tier solution for Bitcoin. The main goal of Lightning Network is to scale and speed up the blockchain network for the sake of making instant micropayments with low fees. Lightning Network protocol technology allows users to conduct transactions directly with each other without having to write information to the public blockchain.

It is important to understand, however, that instant use of the Lightning Network to send BTCs is not possible. Still, users must open a channel between their own addresses to communicate with each other and top it up with a regular transaction. In addition, the coins in the channel cannot be used for nothing until the channel is closed. Although this is necessary for added security, it is not a convenient feature.

Benefits of the Lightning Network in Bitcoin

Saylor believes that with the Lightning Network, Bitcoin can be significantly scaled up to reach billions of active users. The cryptocurrency could even become a platform for decentralised applications. Here’s his quote on the subject.

Bitcoin’s ethos is to proceed very cautiously and not develop too quickly at a basic level without universal consensus. But in Lightning, you can achieve innovation much more aggressively, developing functionality and taking more of the risks associated with actually using the cryptocurrency.

Former MicroStrategy head Michael Saylor

According to CryptoSlate sources, MicroStrategy is developing an entire suite of solutions for the Lightning Network. The development team is working on an enterprise wallet, enterprise servers, and authentication for the Lightning Network.

MicroStrategy ranks first among all companies in terms of BTC reserves

Recall that Michael Seilo stepped down as MicroStrategy’s CEO at the beginning of August to become its executive chairman. Michael’s influence within the organisation has not diminished, but the switch now allows him to concentrate more on the company’s Bitcoin-related programs. He had previously stated that the collapse of the crypto market had not changed his views on the main cryptocurrency, so he would do everything possible to promote it.

Sailor himself had found himself at the centre of the scandal the previous day. According to Attorney General of the District of Columbia Karl Racine, Michael has not paid income tax in accordance with the laws of the state in which he resides. Moreover, the amount together with penalties could exceed the $100 million mark. Read more about this story in a separate article.

Vitalik Buterin, the creator of Etherium, also shared his opinion on BTC in an interview: he voiced two concerns about the long-term prospects of the main cryptocurrency. The first factor is the gradual transition to providing miners only with commissions on the coin’s network, which is happening against the backdrop of declining rewards per block.

Every 210,000 blocks or approximately four years, Bitcoin goes through a halving process that halves the reward for miners in BTC for creating a block. In the future, this reward will be so insignificant in bitcoins that miners’ income will be provided mainly by commissions for the transactions they process. But for now, revenue from commissions remains very low, so this could become a risk factor in the future. Here is Vitalik’s quote, cited by The Block.

First, in the long run, Bitcoin’s network will be secured solely through commissions, but the cryptocurrency is simply not achieving the level of this revenue item that is needed to power the entire system on a scale of trillions of dollars in capitalization.

Aggregate income of miners and the price of Etherium

Simple maths: the aggregate income of miners from commissions is about $300,000 per day. That figure has not changed much in the last five years, with a few exceptions where commissions have briefly peaked due to network congestion. At the same time, the total income of miners now amounts to about 18.5 million dollars per day.

That is, if in the future the situation with commissions does not change significantly, miners simply will not be able to economically sustain their operations. This will cause miners to go out of business, which will lead to a drop in hash rate. And the lower the hash rate, the easier it is to attack the cryptocurrency network, i.e. for economic reasons its security could suffer.

The second factor Buterin mentioned is the high attractiveness of the Proof-of-Stake (PoS) consensus algorithm compared to Proof-of-Work (PoW). Etherium is migrating to PoS as early as this month, but a similar transition in Bitcoin’s history is unlikely to happen, as it is too big a reform for the entire crypto industry. Here’s Vitalik’s quote on the subject.

Of course, if Bitcoin does come under attack, I expect the political will to move to at least hybrid Proof-of-Stake will quickly emerge, but it will clearly be a painful transition.

Bitcoins in storage


We believe that calling Lightning Network the main technology in the world today is a clear exaggeration. But to use it, you have to create channels and replenish them, which is not something a novice can do, and it takes time. However, it's not hard to understand Sailor: being a well-known Bitcoin fan, he has to support those technologies, which are available in the BTC network. And since the LN is the most popular among them, Sailor promotes it.

However, for the mass popularity of cryptocurrencies, networks with good support for mobile devices and without having to deal with additional customisation - such as Solana. In addition, commissions in this blockchain are more suitable for newcomers, as they are often a hundredth of a cent.


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