Cryptocurrency crash: Bitcoin’s ambition and potential haven’t changed, and here’s why





The Bitcoin 2022 conference brought together over 25,000 attendees in Miami last month to discuss the future of the largest crypto-currency of the world. The event, which attendees called “extravagant” and compared to a bacchanalia, was marked by Peter Thiel’s infamous speech, in which the venture capitalist rallied bitcoin supporters against a list of people he described as the haters of bitcoin, including Warren Buffet and Jamie Dimon.

While Mr. Thiel’s speech garnered the lion’s share of the attention surrounding the conference, many investors, developers and founders of the Bitcoin community gathered at the same event to discuss a threat that could arise. far more pressing than the aforementioned personae non gratae: competition.

Even though the overall cryptocurrency market plunged this week, bitcoin remains the most valuable crypto-asset in the world, with a market capitalization of around $589 billion as of May 9. Its status derives, in part, from the advantage of having been the first cryptocurrency token on a public blockchain.

But as new blockchains continue to emerge, and after last year’s “DeFi” summer that brought new momentum to Ethereum, bitcoin investors have had to start watching their backs. Today, blockchain proponents are investing capital to ensure it can maintain its dominance as a form of money and expand into other use cases through decentralized applications ( dApps) in order to stay in the race against competitors like Ethereum and Solana.

The Payments Advantage of Bitcoin

Bitcoin’s advantage has generally been described as its value as an asset to hedge against inflation, much like gold, due to its fixed supply. On the same subject : Coinbase informs some Russian users that their accounts may be blocked.. Bitcoin proponents including Thiel, ARK Invest’s Cathie Wood, and MicroStrategy’s Michael Saylor all spoke at Bitcoin 2022 about its ability to serve as a store of value when central banks loosen policy and let inflation run wild. , as has been the case in the United States for most of the COVID-19 pandemic.

The reality has not been that simple, as bitcoin has often traded lower during times of rising inflation in the United States. But bitcoin proponents say its value is most clearly visible in developing countries, especially those that experience hyperinflation or have a large proportion of unbanked people. They view it as a relatively safe asset that can enable faster and more efficient payments, both within and across borders.

The Bitcoin network itself only supports about five transactions per second, according to the stock Exchange of Binance cryptocurrencies. Bitcoin has integrated a layer two protocol called Lightning Network to increase its speed and efficiency while reducing transaction costs, a piece of infrastructure used by the nation of El Salvador and major crypto exchanges like Kraken.

The Lightning Labs startup, which raised a $70 million Series B round last month, is at the forefront of developing Bitcoin’s Lightning Network. It is building infrastructure for the Bitcoin Lightning Network similar to Visa’s payment network, Elizabeth Stark, CEO and co-founder of Lightning Labs, told TechCrunch.

The Lightning Network can execute hundreds of thousands of transactions per second by settling off-chain transactions in a separate ledger, freeing up space on the first layer of the Bitcoin blockchain while respecting the underlying protocol, a explained Mr. Stark.

“People want access to bitcoin, the asset… When you look at the stability, security and use case of global payments, and global transaction aspects, that’s where bitcoin and the Lightning Network go. shine,” Stark said.

Lighting Labs recently announced a proposal to create Taro, a protocol that would allow people without bank accounts to send and receive money in the form of stablecoins representing their national fiat currency through mobile apps.

“If I were Visa, I would be scared, because there are a lot of people who have mobile phones, but they no longer need to log into the traditional system, and then merchants no longer need pay the 3% fee plus 30 cents [pour une transaction]. Fees can be significantly reduced compared to the traditional system,” Stark told TechCrunch.

Startup Moon, in fact, is partnering with Visa to allow users to purchase goods and services with bitcoin through the Lightning Network on any US-based e-commerce site using the rails of Visa.

As Lightning Labs focuses on optimizing global payments through the Lighting Network, trading platform Robinhood has found the network useful in keeping network fees low on its new crypto offering, which it has rolled out for users last month, Johann Kerbrat, Robinhood’s crypto CTO, told TechCrunch.

“We will support Lightning on the app [Robinhood], so you’ll be able to connect it to pay merchants directly with the Lightning Network,” Kerbrat said. “It also means you’ll be able to kind of create a channel between people using Robinhood outside of Robinhood and be able to trade bitcoin for almost zero fees. »

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Thomas Estimbre
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Cryptocurrency crash: Bitcoin’s ambition and potential haven’t changed, and here’s why


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