Cryptocurrency Crash: Bitcoin’s Ambition and Potential Have Not Changed, Here’s Why:

The Bitcoin 2022 conference gathered more than 25,000 attendees in Miami last month to discuss the future of the largest cryptocurrenciesworld currency. The event, which attendees called “extravagant” and likened it to a bacchanalia, was marked by Peter Thiel’s infamous speech, in which the venture capitalist rallied bitcoin supporters against a list of people he described as bitcoin haters, including Warren Buffet. and Jamie Dimon.

While Mr. Thiel’s speech drew the lion’s share of attention around the conference, many investors, developers and founders of the Bitcoin community gathered at the same event to discuss a threat that could arise. †

Although the overall cryptocurrency market plummeted this week, bitcoin remains the most valuable crypto asset in the world, with a market cap of approximately $589 billion as of May 9. Its status stems in part from its advantage of being the first cryptocurrency token on a public blockchain.

But as new blockchains continue to emerge, and after last year’s “DeFi” summer that brought new momentum to Ethereum, bitcoin investors have had to start to be wary. Today, blockchain proponents are investing capital to ensure it can maintain its dominance as a form of money and expand into other use cases through decentralized applications (dApps) to stay in the race against competitors such as Ethereum and Solana.

The Payment Advantage of Bitcoin

Bitcoin’s advantage has generally been described as its value as an asset to hedge against inflation, much like gold, due to its fixed supply. On the same topic: Coinbase is informing some Russian users that their accounts may be blocked.† Bitcoin proponents, including Thiel, Cathie Wood of ARK Invest and Michael Saylor of MicroStrategy, all spoke at Bitcoin 2022 about its ability to act as a store of value as central banks ease policy and let inflation run wild. , as has been the case in the United States. for most of the COVID-19 pandemic.

The reality was not so simple, as bitcoin has often traded lower during times of rising inflation in the United States. But bitcoin proponents say its value is most apparent in developing countries, especially those experiencing hyperinflation or a large proportion of unbanked people. They view it as a relatively secure asset that enables faster and more efficient payments both within and across borders.

The Bitcoin network itself only supports about five transactions per second, according to the scholarship: of Binance cryptocurrencies. Bitcoin has integrated a layer two protocol called Lightning Network to increase speed and efficiency while reducing transaction costs, a piece of infrastructure used by the nation of El Salvador and major crypto exchanges such as Kraken.

The Lightning Labs startup, which raised a $70 million Series B round last month, is leading the way in developing Bitcoin’s Lightning Network. It is building infrastructure for the Bitcoin Lightning Network, similar to Visa’s payment network, Elizabeth Stark, CEO and co-founder of Lightning Labs, told TechCrunch.

The Lightning Network can execute hundreds of thousands of transactions per second by handling off-chain transactions in a separate ledger, freeing up space on the first layer of the Bitcoin blockchain while respecting the underlying protocol, explains Mr. Stark.

“People want access to bitcoin, the asset… If you look at the stability, security and usage of global payments and global transaction aspects, that’s where bitcoin and the Lightning Network are going to shine,” Stark said.

Lighting Labs recently announced a proposal to create Taro, a protocol that allows unbanked people to send and receive money in the form of stablecoins representing their national fiat currency via mobile apps.

“If I were Visa, I would be scared because there are many people who have cell phones, but they no longer need to log into the traditional system, and merchants no longer have to pay the 3% plus 30 cents fee. Pay [pour une transaction]† Costs can be significantly reduced compared to the traditional system,” Stark told TechCrunch.

Startup Moon is actually partnering with Visa to allow users to purchase goods and services with bitcoin through the Lightning Network on any US-based e-commerce site using Visa’s rails.

As Lightning Labs focuses on optimizing global payments through the Lighting Network, commerce platform Robinhood has found the network helpful in keeping network costs low for its new crypto offering, which it rolled out to users last month, Robinhood’s Johann Kerbrat told me. crypto CTO. TechCrunch.

“We will support Lightning in the app [Robinhood], so you can connect it to pay merchants directly with the Lightning Network,” Kerbrat said. “It also means you can create some sort of channel between people using Robinhood outside of Robinhood and trade bitcoin for almost zero fees. †

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Thomas Estimbre
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