The year 2017 saw an explosion of altcoins, all of them focused at being better than bitcoin (BTC). That’s why we now have coins that dwarf BTC in terms of transaction speeds, while others are way better than bitcoin when it comes to privacy. For a moment, this may look like the end of BTC, but in reality, it’s not. In fact, BTC is about to regain its all-time dominance of the crypto currency market, thanks to the lightning network.
The lightning network is introducing a new layer to bitcoin (BTC). Through this layer, transactions will increase tremendously, while maintaining the security and transactions validity strengths of bitcoin. In essence, BTC doesn’t have to become faster, since that is already handled by the lightning network.
To help you better understand this, think about your social media applications. When you send a photo to your friends on snapchat, do you ever sit to think about how the photo reaches them? You know, like what complicated mathematical stuff will take place for your friend to get that photo? Absolutely not! You only care that your friend got the message. Unknown to you, for that photo to get from your device to your friend’s device, there is something called TCP/IP that made it happen.
Your photo moves through the different TCP/IP layers such as the transport layer, the link layer, and the application layer. But while highly critical for your day-to-day communication, no one thinks of TCP/IP unless they are network professionals.
That’s what’s about to happen to bitcoin (BTC). With the advent of the lightning network, bitcoin is introducing a new layer, one that makes it possible to send fast transactions, while still allowing it to be bitcoin. That is a blockchain system that allows for decentralized transactions over a secure network. This renders altcoins that claim to be better than bitcoin pretty much worthless.
For instance, ripple claims to offer fast transaction speeds that eclipse bitcoin, and rival those of Visa. But while doing this ripple compromises on transaction security. That’s where bitcoin layers come in. Unlike Ripple, the issue of transaction speeds can be handled by the lightning network layer of bitcoin without compromising on the integrity of transactions. That’s because the security and integrity of the transactions are safeguarded by the bitcoin infrastructure.
What of issues such as privacy? There are many coins out there such as Monero that pride themselves in top-notch privacy. Does this mean that they will eventually replace bitcoin because of this feature? Absolutely not! All that is needed is for someone to create a layer on the bitcoin network that offers privacy while still maintaining the integrity and security of bitcoin below it. Privacy coins would be unable to compete with such an application.
In essence, the layering approach that bitcoin (BTC) is allowing it to serve its core purpose of decentralization in a secure and reliable environment. Everything else can be handled by the endless stream of layered applications that will be launched on the bitcoin network in the future. There is absolutely no need for altcoins once this happens.
This information should not be interpreted as an endorsement of cryptocurrencies or a recommendation to invest. Historic performance is no guarantee of future returns. As an investment class, cryptocurrencies are speculative investments and investing in cryptocurrencies involves significant risks – they are highly volatile, vulnerable to hacking and capital loss and sensitive to secondary activity. Before investing you should obtain advice and decide whether the potential return outweighs the risks.