Friday, February 16, 2018

Cryptocurrency Micropayments: Speed, Scaling and Evangelists

Alternate title: Putting the currency in cryptocurrency.

First up, Inside Futures (the derivative, not 'tomorrow'):

Cryptocurrencies and the Race for Speed
Speed modulates the technological landscape: it converts dynamic flows into conditions of relative stasis; it overruns emerging developments with a history that has left it behind; and it transforms the clarity of steady mobilization into a series of disarticulated blurs.
Speed, once again, is at the center of the competitive cryptocurrency space.

Enter Lightning:
Dubbed a potential game-changer, the Lightning Network is a "secondary" payment protocol that potentially allows for instantaneous micropayments in Bitcoin and other cryptocurrencies. As transactions would be grafted onto a layer above the blockchain, significantly increasing its speed while decreasing its cost, the Lightning Network may serve as a solution to Bitcoins scalability problem.

Scalability is an industry-wide issue, as size and frequency limitations compromise the transactional capacities of just about every functioning cryptocurrency. With Bitcoin in a position to charge ahead with the new protocol, other cryptocurrencies are preparing to test or implement comparable versions of their own.
  • Litecoin, whose protocol is perhaps the most similar to Bitcoins, has been working with Lightning Labs to launch the network simultaneously with Bitcoin.
  • Stellar added lightning implementation to its 2018 Stellar Roadmap; Jeremy Rubin, who currently leads Stellars lightning network development, states that "It's fairly close to working to the point where the public can test with real money, but not necessarily at the point where people can operate a business on it quite yet."
  • Ethereum is working to implement Raiden, their own secondary payment protocol solution to scale transactions and microtransactions.
  • NEOs scaling solution is called Trinity (Trinity State Channels), a payment channel functionality that will increase its capacity well beyond its already exceptional velocity of 10.000 tps.
  • ZCash plans to introduce BOLT, a micropayment system that works in alignment with ZCash's anonymity features.
  • Ripple and Monero are reputed to have begun exploring similar second-level payment technologies.
  • And alternative solutions are also in the works, as in the case of Grin (to be launched later this year) which according to Coinbase uses clever cryptography to construct a blockchain that eats up old, unneeded data as it grows larger, so it requires much less space in the long term," and IOTA which claims to have created a blockchain-less blockchain.

Coindesk, who are fans, reminds people: "It's still in beta!"

Sending Bitcoin on Lightning (The Early, Risky Way)
It's like the early days of bitcoin all over again.

Comprised of invite-only chat channels, alien terminology and warning signs at every turn, the nascent ecosystem springing up around Lightning Network, the scaling technology that could end up having the greatest impact yet on bitcoin's capacity, is to date, hopelessly difficult to operate.
"Going to be blunt," one developer wrote, "if you don't know how to compile something, you probably will have a lot more struggles and a lot less coins."

Simply put, Lightning in its current state is dangerous to interact with today. But given the network's big promises - instant transactions and fees that are next to nothing - risk isn't diminishing the appeal.
Companies like Blockstream are already launching Lightning-powered stores that send stickers to bitcoin users who successfully pass funds across the network, while so-called "early Lightning adopters" are being celebrated online for their "bravery" on the blockchain.

"Show the world that you were one the first people to use Lightning on mainnet for a legitimate purchase, if it works," Blockstream's website reads.

It's a sentiment that, given the risks, has garnered criticism by some who feel it mistakenly encourages users to risk real money. That said, there are ways to contribute to the early network without putting your own funds at risk.

This includes hanging out in the testing environment (where the majority of Lightning developers are today) or venturing onto the mainnet (where there's a budding set of best practices, even if pitfalls remain).

Below, we offer our guide for early adopters who want to get their hands on the bleeding-edge tech before it's recommended....MORE
Finally, here's Elizabeth Stark, Co-founder and CEO of Lightning Labs on Bloomberg TV a couple months ago.
And at the Blockstack Summit last summer: