Lightning Labs Unveils Taproot Assets: Will It Cement Bitcoin As A Global Finance Leader?

Lightning Labs has released the Bitcoin Taproot Assets for the Bitcoin Lightning Network, extending support for more assets beyond just BTC

Bitcoin was meant to be trustless electronic money, replacing the greenback. Satoshi Nakamoto thought that the project wouldn’t be as successful.

The problem is: It blew up, and now the project is worth over $1.3 trillion according to CoinMarketCap.

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Scaling Bitcoin Via The Lightning Network

After 14 years, the problem plaguing Bitcoin has nothing to do with security (read, hash rate) but scalability.

Bitcoin scaling challenges are inherent. Only a handful of transactions can be packed in a block and processed after 10 minutes.

It can’t be changed. Nakamoto hard-coded this in the Bitcoin protocol.

The challenge with this system is that users have to pay more for a transaction to be included in a block.

The more congestion there is, the longer it takes for transaction processing.

For this reason, it is not unusual for transaction fees to fluctuate heavily whenever the network is congested.

The good news is that developers are hard at work.

Blockstream and Lightning Labs have been working on the Lightning Network. The platform, which preceded Ethereum layer-2s like Arbitrum and Optimism (perhaps even inspiring this kind of a solution on Ethereum), creates an off-chain channel for users to process BTC transactions cheaply and efficiently.

Development began in 2018, and since then, it has been, for lack of a better word, both hot and cold.

The Lightning Network manages just 5,208 BTC or slightly over $345 million as of July 24.

At the same time, there are over 986,000 supporting nodes and more than 50,000 transfer channels.

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Lightning Labs Releases Taproot Assets

But this is about to change. Yesterday, Lightning Labs released the Taproot Assets, which means the layer-2 solution can support the transfer of other assets, not just Bitcoin.

Therefore, through Taproot Assets, which is still in the trial stage, users are free to mint and transfer these Bitcoin-based assets to the Lightning Network cheaply, securely, and efficiently.

Additionally, in their announcement, Lightning Labs said Taproot Assets would further cement Bitcoin’s position as a global base for routing internet money. Their focus will be creating a tool that would serve the needs of emerging markets, especially Africa, where Bitcoin and stablecoins continue to explode.

In their view, Taproot Assets would enhance access to stablecoins and other efficient payment systems, spurring economic growth.

Developers planning to contribute by building supportive wallets and other tools can access a comprehensive suite of tools, including opening and closing channels or making instant payments.

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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital

Disclaimer

Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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