Bitcoin (BTC) Needs to Integrate Lightning Technology Directly Into It’s Code in Order to Become a Global Currency and Survive Long Term

September 27, 2019 / by Crypto.IQ

Bitcoin (BTC) has an intrinsic scalability problem. The block time for Bitcoin (BTC) is on average 10 minutes and sometimes up to an hour or two, and this is how long it takes for a transaction to confirm. It gets worse, often the transaction fees rapidly rise on the network, which can cause transactions to be stuck as unconfirmed for hours or even days. Additionally, there have been times in the recent past when Bitcoin’s (BTC) transaction fee has risen to $5-10 or even as high as $50, making it useless as an everyday currency. 

This is probably why most retail stores do not accept Bitcoin (BTC), and this scalability problem kills Bitcoins (BTC) chances of being widely adopted as an everyday currency. Instead, Bitcoin (BTC) is mostly used as a speculative asset like a stock. 

And this is also why the Lightning Network was created. The Lightning Network is a second-layer scalability solution that allows for instant and low fee Bitcoin (BTC) transactions. 

The major caveat is that the Lightning Network is mostly off-chain, aside for an on-chain transaction closing and opening a Lightning channel. This means that transaction fees on the Lightning Network are diverted away from the miners who secure the Bitcoin (BTC) blockchain.

Long term this could become a problem. Bitcoin (BTC) has a block halving every 2-3 years. The next block halving is in May 2020, at which point the block reward will decline to 6.25 Bitcoins (BTC). 

Eventually, the block rewards will decline to zero, at which point miners will be dependent on transaction fees. If the Lightning Network is diverting most of the transaction fees away from the actual Bitcoin (BTC) network at that point there will be little incentive to mine Bitcoin (BTC). This will at least cause Bitcoin’s (BTC) hash rate to drastically decline causing the network to become much less secure, and at worst kill off Bitcoin (BTC).

There is an obvious solution. The Lightning Network’s technology could be integrated into Bitcoin’s (BTC) actual code, at which point the transaction fees on the Lightning Network can be distributed to Bitcoin (BTC) miners.

Further, this solution would make Bitcoin (BTC) fully scalable and ready to become a global currency that can be used in everyday life without the need for any second-layer solutions. 

This is especially important because Lightning Network clients are developed and maintained by centralized companies like Lightning Labs and Blockstream. It would be better if the Lightning Network was within’s Bitcoin (BTC) code, removing any elements of centralization. 

Although this solution is simple, it has been proven in the past that making any upgrades to Bitcoin (BTC) is a controversial and difficult task. That being said, the community should come together and integrate the Lightning Network into Bitcoin’s (BTC) actual code since it is a necessary step in order for Bitcoin (BTC) to truly become a global currency. If it is not done, Bitcoin (BTC) will likely remain a speculative asset and possibly become insecure long term due to the diversion of transaction fees onto second-layer Lightning Networks.