Week of 1.19.20 - Issue #12
Welcome to the 12th edition of the ₿it Economy! Each week, I break down the top stories in Bitcoin in a simple in clear format. Enjoy!
Topics: Lightning, Lightning & More Lightning
The Brief:
Jack Dorsey’s Square Crypto announced they will be creating a Lightning Development Kit to promote further innovation on the second-layer scaling solution. The #LNTrustChain2 kicked off earlier in the week in an effort to unite the community and bring further awareness to Bitcoin’s censorship resistant nature. Finally, from the creators of satoshi.games, Lightnite released a draft of the multiplayer battle royale map.
S1: Square Crypto Lightning Development Kit
What is it? - On Monday, the cryptocurrency division of mobile payments company Square, Square Crypto, unveiled that it is building a Lightning Development Kit (LDK). The product is designed to lower the barrier of entry for development on the Lightning Network (LN) by providing developers an easy way to integrate the scaling solution with existing and new Bitcoin wallets. This is analogous to a traditional software development kit (SDK), which is collection of software tools and programs used by developers to create applications for specific platforms. SDK tools will include a range of things, including libraries, documentation, code samples, processes, and guides that developers can use to integrate into their own apps. In similar fashion, the LDK will allow wallet developers to create custom integrations of the Lightning Network through API, demo apps, and other technical tools. The kit is based on the Rust-Lightning project which is full featured but also flexible lightning implementation.
Why it Matters? - Last year, Jack Dorsey openly supported Bitcoin via numerous public channels. Square has shown time and time again that it is a friend of Bitcoin. So, there should be no surprise that the Square Crypto team announced this new product to accelerate bitcoin adoption with the following criteria:
Will the project have an outsized impact on bitcoin, particularly non-custodial bitcoin?
Is the project meeting an underfunded need of the ecosystem that doesn't have a clear business model?
Can this become a self-sustaining open-source project that will attract developers worldwide?
Essentially, it will make it easier for existing Bitcoin wallet providers to add LN capabilities. In order for Bitcoin to become legitimate and mainstream, significant changes are required to make it more secure, private and scalable. Expect this to attract further developers and users to the second layer scaling platform.
"It’s only a matter of time until instant, low-fee bitcoin payments are as common as cash used to be.” - Steve Lee, Square Crypto
Final Take - Lightning development has come a long way.
S2: Bitcoin Lightning Trust Chain V2
What is it? - This week, the Lightning community decided to kick of the second Lightning Torch test. The Lightning Torch, also known as the LN Trust Chain, is a community-driven experiment aimed at raising awareness about the protocol and testing its robustness. It was launched on January 19th, when Bitcoin enthusiast Hodlonaut announced he or she was willing to pass on 100,000 Satoshis via the LN to the first person who seems reliable. Subsequently, that volunteer adds another 10,000 Satoshis and sends the entire amount to another person, and so on. To date, the torch has been in over 40 countries over the past week.
Why It Matters? - The steady growth of the LN can be attributed to another scaling solution, Segregated Witness, often referred to as SegWit. SegWit is a technical change implemented in late 2017 to solve transaction malleability. Transaction malleability is a fancy way of saying that Bitcoin can be stolen from users by changing tiny pieces of transaction information.
A segregated witness creates a sidechain where witness data is stored away from the main blockchain. Thus, preventing transaction IDs from being altered by dishonest users. In the LN, transactions are only added to the main Bitcoin blockchain when usersclose the payment channel. These unconfirmed micropayments only become valid when the payment channel is closed and the total balance of the transactions is processed by the network. Without SegWit, users could alter transaction IDs in these payment channels and the Lightning Network Trust Chain would never have been able to go around the globe. Last time, the challenge went so viral that Jack Dorsey and LinkedIn co-founder Reid Hoffman participated. The Torch concluded in Venezuela, where the Satoshis donated were used to obtain food, necessities and medicine for Venezuelans in need. Under the poor leadership of Nicolas Maduro, the bolivar has been drastically inflating, leading citizens to turn to alternative assets like Bitcoin. The video below recaps last year’s chain.
Final Take - Bitcoin is a safe haven.
S3: Lightnite Battle Royale
What is it? - Calling all gamers, Lightnite, an online multi-player battle royale game, released its latest draft of the game map. The game is like Fortnite, except that every specific interaction between players triggers a monetary reward or penalty. Players earn bitcoin by shooting other players and lose bitcoin when they get shot. The game utilizes the Lightning Network to integrate Bitcoin microtransactions.
Lightnite is a game for both bitcoin and non-bitcoin users. Anyone around the world can create a free account and join the competitive experience without having to make a purchase. Built on the payment rails of the LN, player spending is settled in an instant and private matter. The team has made it easy to earn satoshis by not only winning, but through various challenges and pickups. The project has the potential to disrupt the online video game business economic model. Future teams could rely solely on their in-game winnings to support their day to day lives. Rewards in satoshis offer extra incentives when compared to well-established competitors. Pre-order the here.
Why it Matters? -
Final Thought -
Market Watch
- High: $8,904.82
- Low: $8,338.35
- ATTOW: $8,574.32
Earlier in the week, the price of Bitcoin fell $600 and settled near $8,600. This bearish reversal could be attributed to the MACD crossover which occurred on January 22nd. A bearish crossover occurs when the MACD turns down and crossed below the signal line. Fortunately, there are a few support levels between $8,000 - $8,200 that have defended a drop back into the high seven-thousands. Recently, bearish pressure has faced exhaustion as the price has risen over $8,500. Expect the price to trade within the $8,100 - $8,900 range unless it were to close above $9,300.
Announcements
- BTCPay Server announces Vault - Link
- BIP PR BIP 340-342 - Link
- Bitcoin Optech Newsletter #81 - Link
- Blockstream's Liquid comes to Bisq - Link
Interesting Reads
- Bitcoin: The Blockchain for Truly Smart Contracts - Link
- The Omnibus Model for Custody - Link
- Peter Thiel's backed Clearview has scraped over 3 Billion photos - Link
Great Listens
- Tales from the Crypt #130: Jeremy Rubin - Link
Final Quote
"I wrote a book that answers the question ‘What is Bitcoin?’ It’s 300 pages long, was obsolete the moment it was printed and has to be corrected and updated every three months just to keep up with changes.”
- Andreas Antonopoulos
Have a great week!