Elon Musk claims Lightning Network needed to scale Bitcoin transactions

After a complete, 180-degree turn from bitcoin, Tesla Chief Executive Officer Elon Musk is on Twitter once again, talking about the system and its cryptocurrency, saying that BTC transactions can be scaled and meet increasing demand if layer-2 payments Lightning Network is adopted, making them cheaper and faster.

In his Twitter post, Musk said, “Bitcoin hashing (a.k.a. mining) energy usage is starting to exceed that of medium-sized countries,” making it almost impossible for “small hashers to succeed without those massive economies of scale. For now, Lightning is needed.”

Lightning is a software that processes bitcoin transactions out of its blockchain, making the load on the network lighter. It enables cheaper and faster transactions by allowing user-generated channels to receive and send payments. The Tesla head is therefore suggesting that this is necessary to offer the required bandwidth to scale processes. 

Musk elaborates

In elaborating his comments, Musk said layer counts depend on projected bandwidth and compute, which are currently rising rapidly. This meant bitcoin can carry all human transactions in the future.

Without Lightning network, moving funds across the Bitcoin network takes 14 minutes and has an average cost of $13. The software can help at completing the task almost instantly and at the cost of about one satoshi ($0.00037636).

But as good as that may sound, critics sounded the alarm as they claim that Lightning network compromises decentralization owing to the fact that some computational work is out of the blockchain.

No direct answer

When asked by Twitter crypto advocate BTC Session whether he had considered if Lightning sacrificed on decentralization, the Tesla figurehead only said achieving truly decentralized finance to empower people is a noble and vital goal.

Silicon Valley-based Lightning Labs Inc. started developing the Lightning Network back in 2016, with its beta protocol launched in 2018. Among investors in the project are Square and Twitter CEO Jack Dorsey.

 

Image courtesy of Cointelegraph News/YouTube

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