Lightning Network, Bitcoin Sedgwick, and the Taro project.
- Lightning Network, Bitcoin Sedgwick, and the Taro project come together to create a solution, dealing with the Bitcoin volatility which hinders mass adoption of Bitcoin.
- The title suggests I bit off quite a large amount of information, but I wish to distill it down to a few digestible bit.
- Lets begin with background and move quickly to the Take Home Lesson as my teachers use to say.
Background
- Bitcoin: is perhaps the most significant new financial tool of this century.
- Lightning Network: a side chain of Bitcoin, that makes Bitcoin transactions speed of one million transactions per second, and making Bitcoin transactions so cheap, that using Bitcoin to buy a cup of coffee is economically feasible.
- Sedgwick: a recent Bitcoin fork or software modification, which allows certain cryptocurrency constructs like decentralized exchanges to be built on top of Lightning, and transact with Bitcoin.
- Taro project: a multi-asset peer to peer trading protocol being built on Bitcoin Lightning which makes peer to peer trading of cryptocurrency assets like Stablecoins possible on top of Bitcoin, via Lightning.
Added together why is this important?
- A high level view of this is Bitcoin is a bank in your pocket, which can provide all basic banking functions to the majority of people on this planet who are unbanked, as in not having access to basic core banking financial tools.
- Bitcoin can also be used to provide the tech architecture for the development of local economies which flourish due to increased circulation of money within a community. This increases development of jobs and businesses locally, with resultant economic growth.
- Bitcoin volatility makes it extremely hard for individuals in developing countries with low monthly incomes to survive in a Bitcoin denominated ecosystem financially. Because the volatility in Bitcoin price of 300-400 dollars a day exceeds their total monthly income.This wipes out a months wages, destroying the individuals ability to provide, food, shelter and clothing to their family for a month.
- However the development of Lightning, Sedgwick, and now Taro could bring Stablecoins to Lightning, and to these Bitcoin denominated economies in developing countries.
- These Stablecoins can shield poor people, in Bitcoin denominated economies, from Bitcoin volatility.
- Thus protect them from the instantaneous financial ruin that daily Bitcoin price variations exceeding their total monthly incomes cause, because they can transfer their Bitcoin value when earned to Stablecoins.
- The cherry on top of this is that Lightning makes transactions of a Stablecoin like Tether or USDC very, very cheap also.
- Sweet.
Last words
- Stepping back from this and looking at how these pieces fit together, I am in awe, at how wonderfully these pieces fit together and keep the dream alive in terms of Bitcoin fulfilling the dreams of Satoshi of providing this amazing financial tool to all people regardless of their financial status.
- All I can say is Wow!
About the author..
Shortsegments is a writer focused on cryptocurrency, the blockchain, non-fungible digital tokens or NFTs, and decentralized finance for over four years. He is also a project builder, with three current projects:
- No Loss lottery, a prize linked savings account here on Hive, which awards more the 100 Leo in prizes weekly, and which recent surpassed 5000 tickets sold.
- Easy DeFi, which provides decentralized finance as a service: a two step process for investment into decentralized finance, which allows investors to bypass the complexity of the usual 10-12 step processes which are necessary to invest in decentralized finance. EasyDefi features investment pools on Cubfinance on the Binance Smart Chain blocjkchauin, or PolyCub on Polygon. Pool members can invest Leo, Hive, HBD or SPS. Learn more here
- Hive Business Center a project creating a list of all businesses on Hive and Businesses anywhere which accept Hive or HBD.
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