On 25th August 2022, a demonstration showed the Lightning Network processing a transaction faster than the 64 years old Visa Network.
The Lightning Network is a layer 2 payment platform built on the Bitcoin blockchain network. It takes advantage of Bitcoin’s powerful security protocol while solving its scalability problem by handling transactions off the mainnet.
Using smart contracts and multi-signature scripts, the Lightning Network can confirm payment transactions between two untrusted parties without waiting on the slower mainnet.
Visa is a global payment system that processes money transfers and payments. It was founded in 1958 by the Bank of America as a part of the BankAmericard credit program. Using tokenization and secure encryption, VisaNet is capable of processing over 65,000tps.
To handle this volume of transactions, Bitcoin’s blockchain must manage at least 6GB of transactions per block. This feat is far above its current 7tps capacity.
Before the Lightning Network, users had to pay high transaction fees and wait for long validation periods. So its creation makes previously impossible micropayments both faster and cheaper. This new milestone could lead to greater adoption of crypto payment terminals and increase the total value of Bitcoin’s Network.
David Puell of Ark Invest claims the total transaction value of Bitcoin’s Network has possibly passed the $100trillion mark. But the calculation also includes transfers conducted between wallets of the same user.
He tweeted two days ago that the graph is a “landmark and a factoid, and should be read as such.” The correct measure of activity points to $7.3 trillion as the mark.
This development shows steady acceptance and growth for Bitcoin since its depression in Q2 of 2022.
