Know why they are shooting so high
What do you think is the reason behind Bitcoin prices to reach almost at a 40 percent rise this month?
Once again the Bitcoin rates have shot for the stars.
While some of us are busy feeling grumpy about the apparitional loss for not bothering to invest in the cryptocurrency at the time being, the remaining population doesn’t seem like it is getting a hang of it.
In the second week of December, the rate of just a single Bitcoin on the Luxemburg-based Bitcoin exchange Bitstamp had reached around $14,624, which approximately rounds up to roughly 9,41,420 INR.
What broke down all the boundaries is when the rate of a just a single Bitcoin touched down the $15,000 benchmark some time ago, which is approximately 9,65,625 INR.
We hear you say why on the earth are the rates of Bitcoins surging at such a massive price rush?
Abhishek Gopal, who is the Co-founder and CEO of a blockchain startup called ThroughBit, states that this price push is mainly because today Bitcoins are slowly getting adapted and popularized into the the mainstream financial economy.
In the early bit of December, the USbased Commodity Futures Trading Commission (CFTC) gave permission for two exchanges that would begin the trading in Bitcoin contracts. Several reports suggested that the CME Group, and CBOE Global Markets exchanges will probably offer the Bitcoin futures later in December itself. There are also rumours that the New York-based NASDAQ will also offer a probable trade in Bitcoins.
The Lightning Protocol
Several experts state that the most important reason for today’s Bitcoin high rise can be credited to the lucrative beta testing of Lightning Network. Lighting Network is an overlay network that is built on top of an existing Blockchain, and in this case, it is built on the Bitcoin Blockchain.
Lighting Network is a decentralised network that makes use of a smart contract program in the Blockchain, which further enables instant payments through a massive network of participants. Additionally, a smart contract is termed as a computer protocol that’s designed to expedite, verify, or administer the negotiation or consummation of a given contract.
The advent of Bitcoins has definitely paved in a new pathway to make payments. And as per some popular media reports, Lighting Network will be able to move away some transactions away from the main Blockchain in order to relax the rush of Bitcoin transactions. Lightning Network will permit its buyers and sellers to then transact covertly and later on announce the activity on a said public network.
Just a few weeks ago, the three Blockchain developers – ACINQ, Blockstream, and Lightning Labs declared the 1.0 release of the Lightning protocol functionality. The three Blockchain developers are involved in the Lightning Network. Additionally, they went on to become the world’s first Lightning test payments that’d take place on the Bitcoin mainnet.
As per a media report published in a popular outlet, each of these three teams created certain Lightning implementations. ACINQ manufactured eclair, Blockstream formulated c-lightning, and Lightning Labs invented lnd.
This test was primarily conducted to check the interoperability of these implementations in the network where all the payments are being routed without being isolated.
So, how do you think will Lightning Network help transacting Bitcoins in the future? The Lightning Network website reads as following:
- Instant Payments: As per the Lightning Network website, the Lightning-fast Blockchain payments will allow for quick payments without getting you concerned about block confirmation times. The security is dealt by Blockchain smart-contracts. And the payment speed falls under milliseconds to seconds, as against with 10 minutes. It takes 10 minutes to transfer a single Bitcoin.
- Scalability: The website also claims to allow millions of transactions to take place within a second across the entire network.
- Low Cost: By transacting and settling off-Blockchain, the program will offer you particularly low fees. This further permits the rising use cases of Bitcoin micropayments.
- Cross Blockchains: Lightning Network succeeds by making a transaction outside the main Bitcoin Blockchain. This in turn gives results in a speedy transaction, which is later joined into the main Bitcoin Blockchain.
However, cryptocurrency won’t be so easily and readily available for use yet. Developers emphasize that there’s still frizz left to work out before your preferred food court starts accepting payments using Bitcoins.