- The Bitcoin Lightning Network is back in the headlines thanks to the El Salvador Bitcoin news
- The country’s population could soon be using the network on a regular basis for everyday transactions
- Success could be the biggest turning point for the Lightning Network in its six-year history
When news broke over the weekend that El Salvador was on the verge of accepting Bitcoin as legal tender, many anti-Bitcoiners will have been sharpening their knives for a variety of reasons. On one point however, even Bitcoin supporters will have been in agreement – how would they make everyday payments on the Bitcoin network? The answer was the Lightning Network, a technology that has been almost forgotten by some sections of the Bitcoin movement. The El Salvador/Bitcoin deal should represent a coming of age for the Lightning Network after six years of underperformance.
Six Years in the Making
The Bitcoin Lightning Network was devised in 2015, long before Bitcoin’s scaling problems really came to light. The Layer 2 solution promised to massively cut Bitcoin transaction times and costs by conducting them through channels off-chain, but it has never taken off to the extent that it would perhaps have expected to by now.
This is despite Bitcoin’s massive rise in popularity over the past 18 months and the fact that transaction costs have all but excluded it from being a viable payment method.
However, concerns over the security of funds held in channels and the difficulty in using the wide variety of Lightning Network apps have led to the majority of Bitcoin transactions continuing to be conducted on-chain, despite the high cost. Six years of development and still people prefer to use the older, slower, and more expensive version. Not a great advert.
Lightning Network Finally Gets Chance to Shine
Lightning Network adoption seems to have turned a corner this year however. OKEx integrated Lightning Network technology into its Bitcoin transactions in February, but clearly the biggest development is the El Salvador deal. It says much that many reacted with surprise that the Lightning Network would form such a crucial part of the country’s adoption, but this is indeed what will happen – Lightning Network wallet app maker Strike will work with the government to develop the infrastructure to convert the population from being largely cash users to using Bitcoin through the Lightning Network.
The fact that the residents of El Salvador could soon be using the Lightning Network to conduct all manner of daily Bitcoin transactions is a little like an aged athlete suddenly winning a gold medal at the Olympics after years of barely qualifying. Everyone in the Bitcoin community has known about Lightning Network for years, but until this year it had been largely forgotten or ignored.
A successful rollout in El Salvador could see the security and usability issues of the Lightning Network banished for good, meaning that 2021 could finally be the year when it achieves the kind of exposure and adoption that it deserves and that Bitcoin needs.