Will bitcoin not stop falling? – Lightning Network and other crypto coins
The year started very badly for those who were excited by the huge appreciation of bitcoin last year. Even so it may be worth it, with the innovations that are emerging
The first month of the year has just passed, and it seems that the decline of bitcoin will not end, and with every percentage point that the currency falls, the investor who is losing money feels a little more pain.
For the human being, the feeling of loss can make him make horrible decisions, which, in fact, generates losses. For example, a prudent investor who protects most of his equity from other investments. And who was enthusiastic about the fabulous appreciation of digital currency last year (coming late to the party) and then did not give up his positions, the loss is just emotional. If he sells everything, he takes the material damage.
And there are lots of reasons for optimism about the future of decentralized technologies because of its disruptive power (which is being called blockchain). While investors are biting their nails with falling prices, developers, who understand technology much more than mere mortals, are focused on delivering improvements to solve network problems.
Bitcoin and the Lightning Network
One such enhancement initiative is the Lightning Network, which promises to address Bitcoin’s scalability issues by delivering faster and cheaper transactions to the ecosystem. The development of the project, like everything else in this market, is exponential. On January 19, we had 29 nodes giving life to the network. The next day, the first transaction was made.
In a linear paradigm, one might think that within a few months we would have only ten dozen more transactions and nodes. However, when writing this newsletter, the network already has more than 400 nodes, and more and more we join the network, and more channels are signed between these points.
Undoubtedly, it is not enough to just create stitches in a mesh so that everything is solved. There is a lot of development behind, which ensures the security of the network, and each new node that appears is another vote of confidence for Lightning Network and Bitcoin.
With the network in full operation, it would be possible to make transactions at a super-reduced rate and faster than it currently does. So much of those problems that opponents of this technology point out would be somewhat mitigated.
And until the building of the Lightning Network, there will be many obstacles because it is an innovation not yet tested. But once this network starts transferring values safely and quickly a freeway for bitcoin will be created to be used again without hindrance as a payment method.
What about the other crypto coins?
It is not only Bitcoin that is developing at full steam. The major protocols in this market continue to implement code improvements, targeting scalability, usability, and cost efficiency goals.
Ethereum is one of the main examples, following an extensive roadmap, with emphasis on the implementation of Proof-of-Stake as a consensus model.
It is the quality assets that the investor needs to “grab” at times like this. Behind market volatility are protocols, complex codes, and, above all, enormous innovations.
As in any market, what is not good will be wiped off the map, while quality assets – read the technical quality and potential to solve real technological problems – will inevitably stand out.
In a matter of a few years, more than 1,500 assets were created. And all are unique, special and will survive the time and market?
Of course not. So before making any diversification into newer, poorly tested assets, it is preferable those with functional products, a good team of developers and being used.