El Salvador President Nayib Bukele took a victory lap on Monday after the Bank of England’s British pound rapidly depreciated against the dollar. The institution has since resumed quantitative easing. Its action marks a clear pivot that many in the Bitcoin community predicted central banks would be forced into months in advance. Bukele’s Callout Bukele tagged the Bank of England with a triumphant “Told you,” over Twitter, scoring over 14,000 like and 2000 retweets from his followers. His brief comment…
There is an inherent lack of trust in the decentralized network and Proof of Work consensus algorithm of Bitcoin. Nevertheless, Bitcoin’s growth turned it to the leading asset worldwide, thereby bringing up issues like scalability.
Hence, second-layer solutions such as the Lightning network have been introduced to solve the problem. The question now is about possible depletion of the trustless domain on which Bitcoin is based on by the Lightning network.
Lisa Neigut of Blockstream spoke on the Stephen Livera podcast concerning Lightning network development as well as their effect on Bitcoin’s domain. According to Neigut, there is debate over the possibility of such solutions bringing trust into the network. Neigut differentiated between an on-chain transaction and the ones of the Lightning network.
People in the cryptocurrency domain have been asking whether such second layer scalability solutions are really secure. It is possible to probe and time attacks capable of having dire consequences for end-users; hence, the scalability solution provided by the Lightning network is yet to fully solve the problem.
Speed Lightning works by creating resource pools for transactions. Neigut noted the function of multi-signatures which involves agreement between both parties regarding how that money is being spent. The agreement is made by signing a transaction with outputs that release money to both parties.
Over the past month, there has been a remarkable growth in the aggregated value locked in the Lightning network. Before the increment, there was a decline in value locked which was prompted by the fall of Bitcoin price on March 12. As at the time of writing, the aggregate value locked was more than $7.2 million.
Neigut seemed optimistic about the Lightning kind of trust model because “you don’t have to trust” that you will receive payment. You can receive payment on-chain at any time.