Tag: Bitcoin

Bitcoin (BTC) is the first cryptocurrency created by Satoshi Nakamoto in 2008. With the underlying technology blockchain, bitcoin has redefining money in terms of money form, money issuance standard and money movement. Bitcoin has a limit of 21 million coins and uses proof-of-work (POW) consensus. In some sense, bitcoin removes our reliance on central banks and traditional financial institutions that we have to trust on. Bitcoin brings monetary freedom.

Position: #Long #Short
Predictions: #Predictions
Analysis: #Analysis

Bitcoin Miner Integrated Ventures Sees Decline in Annual Revenue Despite Higher BTC Production

by Blockchain NewsOctober 2, 2023

Integrated Ventures Inc. (OTCQB: INTV) disclosed its yearly mining revenues amounting to $3,862,849 with a production of 162.71 bitcoins for the financial period ending on July 30, 2023, according to a press release on September 29, 2023. Despite the increased bitcoin production compared to 108.29 bitcoins in 2022, the company witnessed a revenue dip from $4,871,473. The decreased revenue against a higher bitcoin yield is primarily attributed to the faltering cryptocurrency market conditions during 2023, where the average dollar value of mined bitcoin plummeted to $23,740.44 from $44,986.17 in the preceding year.

Integrated Ventures’ financial highlight unveiled a net income loss of $25,459,967 for 2023, significantly up from the $688,003 net loss in 2022. The stark increase in net income loss was largely driven by expenses including a depreciation expense of $3,597,346, loss on disposition of mining equipment amounting to $1,197,522, impairment of mining equipment valued at $5,574,363, and a noteworthy annual stock compensation to management, valued at $15,247,500. Excluding these expenses, the annual income loss would stand at $458,736.

The gross loss for the year was reported at $6,297,476, primarily due to an uptick in depreciation expense which totaled $3,597,346. On excluding this expense, the annual gross profit would have been positioned at $1,162,733.

CEO Steve Rubakh acknowledged the challenging cryptocurrency milieu, marked by events like the FTX debacle, which impacted mining revenues. Despite these hurdles, the company managed to enhance bitcoin production without additional capital infusion.

Furthermore, the management is eyeing fintech sectors emphasizing liquidity, alongside AI/VR smart glasses/headsets. Due diligence is underway on two promising projects for potential strategic mergers or asset acquisitions to bolster shareholder value and revenue growth.

Integrated Ventures, a Technology Holdings Company, continues to focus on cryptocurrency mining among other tech-oriented domains. The company’s revenue streams presently encompass digital currency mining and hosting.

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How Bitcoin will react to US Government Shutdown

by Blockchain NewsOctober 1, 2023

Amidst an imminent government shutdown due to Congress’s stalled federal appropriations bill for the fiscal year beginning October 1, 2023, the financial sector holds its breath. The potential shutdown’s ripple effects are poised to stretch beyond traditional markets, reaching into the cryptocurrency sphere, particularly Bitcoin, according to Greg Cipolaro, Global Head of Research at NYDIG.

Federal Shutdowns: An Emerging Norm

The occurrence of federal shutdowns is becoming less sporadic. Over the years, 10 instances have been recorded, with the most recent one in 2018 – 2019 lasting a record 35 days, costing the government an estimated $5 billion. It’s difficult to predict a shutdown’s duration, as it largely hinges on lawmakers’ negotiations. However, the increasing political polarization hints at a longer standoff this time around.

Credit Rating Agencies on High Alert

Moody’s, holding a AAA credit rating on the US, sounded the alarm on September 27, 2023, cautioning against adverse impacts of a shutdown. This echoes past sentiments, like the 2011 S&P downgrade amidst debt ceiling debates, spotlighting weakened US fiscal policymaking. The persisting discord among political factions continues to unsettle credit rating agencies, potentially foreshadowing broader financial market disruptions.

Bitcoin ETF Awaits SEC Green Light

A direct casualty of the possible shutdown is the delay in the Securities and Exchange Commission (SEC) approval for a spot Bitcoin ETF. The furlough would significantly trim down SEC’s staff from 4,604 to a mere 437, stalling critical financial product approvals. Notably, the SEC has already postponed decisions on most ETFs, anticipating a prolonged shutdown. The spotlight is on the iShares Bitcoin Trust from BlackRock, among others, awaiting SEC’s nod, which now hinges on the resumption of federal operations post-shutdown.

Law Enforcement and Financial Regulation: The Dual Impact

Two pivotal areas within the crypto realm stand to bear the brunt: law enforcement, chiefly the Department of Justice (DOJ), and financial regulation, predominantly the SEC. While the DOJ is slightly insulated with 84% of its 114,521 staff exempted from furloughs, SEC faces a more stark reality. The severely reduced staff could mean a longer wait for the crypto industry on crucial financial product approvals, particularly the Bitcoin ETF.

Market Reactions Amidst Uncertainty

Bitcoin nudged up by 1.9% over the week despite the ETF decision delay, possibly finding a silver lining in the US’s fiscal woes. Conversely, traditional hedges and markets felt the heat. Gold dipped by 2.9%, the S&P 500 by 1.3%, and the Nasdaq Composite by 0.2%. The bond market too saw a slump, while oil bucked the trend with a 2.3% rise, reflecting a mixed bag of market reactions as the shutdown looms.

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Tagged : Analysis / Bitcoin / CREDIT RATING AGENCIES / Cryptocurrency Market / FEDERAL APPROPRIATIONS BILL / FINANCIAL IMPACT / FINANCIAL REGULATION / Law Enforcement / MARKET REACTIONS / SEC / US GOVERNMENT SHUTDOWN

ProShares to Launch First Ether ETF and Blended Crypto Funds

by Blockchain NewsOctober 1, 2023

Bethesda, Maryland-based ProShares, a prominent player in the crypto-linked ETF market, has announced a significant expansion of its product line. On October 2, 2023, the firm will launch three new exchange-traded funds (ETFs), including the ProShares Ether Strategy ETF (EETH). This will be the first ETF specifically designed to track the performance of ether, the second-largest cryptocurrency by market capitalization. In addition to EETH, ProShares is introducing two blended ETFs that aim to offer investors exposure to both bitcoin and ether, the dominant cryptocurrencies in the market.

ProShares has been a pioneer in the ETF industry since its inception in 2006. With over $60 billion in managed assets, the firm has been a leader in various investment strategies, including crypto, dividend growth, and geared (leveraged and inverse) ETFs.

The launch of these ETFs is a significant milestone in the maturation of the cryptocurrency market. It follows ProShares’ earlier successes, including the launch of BITO in 2021 and BITI, the first U.S. short bitcoin-linked ETF, in 2022. These new ETFs are expected to further legitimize cryptocurrency investments and could potentially attract a new wave of institutional investors.

Michael L. Sapir, CEO of ProShares, highlighted the growing demand for crypto-linked ETFs, citing the success of their bitcoin-linked ETF, BITO. Launched nearly two years ago, BITO has amassed more than $2 billion in net inflows and has become the largest crypto-linked ETF globally. “The launch of EETH is a response to substantial investor demand for a regulated financial product that targets ether,” said Sapir.

ProShares is also diversifying its offerings with the Bitcoin & Ether Equal Weight Strategy ETF (BETE) and the Bitcoin & Ether Market Cap Weight Strategy ETF (BETH). BETE will undergo monthly rebalancing to maintain a 50/50 weighting between bitcoin and ether. In contrast, BETH will adjust its holdings based on the market capitalization of the two cryptocurrencies. “These groundbreaking ETFs offer investors the opportunity to target the performance of the two leading cryptocurrencies through a single transaction and a single ticker,” Sapir elaborated.

One of the key advantages of these new ETFs is their accessibility through traditional brokerage accounts. This eliminates the need for investors to set up a separate crypto custodian, exchange account, or wallet. “Our crypto-linked ETFs are designed to attract investors who are interested in cryptocurrencies but are concerned about the risks associated with custody or the complexities of direct purchases,” Sapir noted.

Unlike many other investment vehicles, these ETFs do not invest directly in cryptocurrencies. Instead, they primarily invest in ether and bitcoin futures. According to ProShares’ research, these futures have historically shown a .99 correlation with their respective cryptocurrencies, offering a near-perfect tracking of the underlying assets.

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Tagged : BETE / BETH / Bitcoin / Bito / Cryptocurrency / Etf / ETHER / Futures / INVESTMENT STRATEGY / MARKET CAPITALIZATION / MICHAEL L. SAPIR / News / Proshares

SEC Delays Decision on Spot Bitcoin ETFs Due to U.S. Government Shutdown Concerns

by Blockchain NewsSeptember 29, 2023

The Securities and Exchange Commission (SEC) of the United States has recently announced the postponement of its decision regarding several proposals for spot Bitcoin exchange-traded funds (ETFs). This decision impacts applications from well-known entities such as BlackRock, Invesco, Bitwise, and Valkyrie, as stated in separate filings made on September 28.

The surprise delay, which came two weeks earlier than the anticipated deadline between October 16–19, has left many applicants puzzled. Analysts, including James Seyffart from Bloomberg ETFs, suggest that the applications submitted by Fidelity, VanEck, and WisdomTree might face similar delays.

The timing of these delays is directly linked to the looming shutdown of the United States government, expected to commence on October 1 or possibly even earlier, according to James Seyffart. This situation is poised to disrupt various federal agencies, including financial regulators.

This means we are expecting all #Bitcoin ETF’s squared in Magenta to get their Delay orders today or tomorrow. (these are early due to the govt shutdown)

The SEC’s decision to postpone a significant number of spot Bitcoin ETF applicants was initially made at the end of August, just as the first deadline was approaching. Market participants now await the SEC’s decision, which is expected no later than the middle of March.

The Securities and Exchange Commission’s decision to postpone the evaluation of spot Bitcoin ETF applications has sent ripples through the cryptocurrency and financial markets. These ETFs are highly anticipated by both institutional and retail investors, as they would provide a regulated and accessible way to invest in Bitcoin.

The delay, however, is not merely a bureaucratic decision. It is rooted in the practical concerns of the potential U.S. government shutdown. This shutdown, if it occurs, could disrupt the normal functioning of various federal agencies, including the SEC. As a result, the SEC has opted to defer its decisions on these crucial ETF applications to ensure that they are made under stable and secure conditions.

The news of the SEC’s decision has had a mixed impact on the cryptocurrency market. On one hand, it reflects the SEC’s cautious approach to approving Bitcoin-related financial products, which has been a consistent theme in recent years. On the other hand, market participants were hopeful that these ETFs would bring more institutional money into the cryptocurrency space, potentially driving up prices.

Investors in cryptocurrency-related assets, including Bitcoin, have been closely watching the ETF approval process. The delay has introduced uncertainty into the market, which often responds negatively to such uncertainties. Bitcoin’s price experienced a slight dip in response to the news, but the full extent of the market’s reaction remains to be seen.

The SEC’s decision to postpone the evaluation of spot Bitcoin ETFs due to concerns about a potential U.S. government shutdown has added another layer of complexity to the cryptocurrency regulatory landscape. While it is a temporary setback, it underscores the regulatory challenges that cryptocurrencies face as they continue to gain mainstream attention.

Market participants will closely monitor developments surrounding these ETF applications and the U.S. government’s funding situation. The decision expected by mid-March will provide clarity on whether these ETFs will finally become a reality. In the meantime, the cryptocurrency market will continue to evolve, with or without the ETFs, as it matures and adapts to changing regulatory dynamics.

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Tagged : Bitcoin / Cryptocurrency Market / DELAY / Etfs / GOVERNMENT SHUTDOWN / News / SEC

Bitcoin Ordinals Creator Casey Rodarmor Expands Ecosystem with “Runes”

by Blockchain NewsSeptember 27, 2023

Key Takeaways

Casey Rodarmor, known for Bitcoin Ordinals, introduces “Runes,” a new fungible token protocol for Bitcoin.

“Runes” aims for a simplified user experience and responsible UTXO management.

The announcement comes after the success of Bitcoin Ordinals, another innovative protocol by Rodarmor that transformed satoshis into NFTs.

Casey Rodarmor, who gained prominence for his creation of Bitcoin Ordinals, has announced a new fungible token protocol for Bitcoin named “Runes.” The announcement was made on September 26, 2023, and quickly gained over 250,000 views. This comes after the success of Bitcoin Ordinals, a system that transformed individual satoshis into non-fungible tokens (NFTs), adding another layer of innovation to the Bitcoin blockchain.

The Genesis of Runes

Rodarmor acknowledges the controversial nature of fungible tokens, describing them as mostly “scams and memes.” However, he believes that a well-designed fungible token protocol could bring “significant transaction fee revenue, developer mindshare, and users to Bitcoin.” Runes aims to offer a more streamlined, user-friendly experience while promoting responsible UTXO (Unspent Transaction Output) management, similar to the user-friendly journeys observed in Bitcoin Ordinals.

Technical Aspects of Runes

Runes is designed to be UTXO-based, fitting naturally into Bitcoin’s existing architecture. It aims to avoid the creation of “junk” UTXOs and does not require a native token for protocol operations. The protocol uses OP_RETURN followed by a data push of the ASCII uppercase letter “R” to contain protocol messages in transactions. Invalid protocol messages result in the burning of the input runes, allowing for future upgrades.

Runes and Bitcoin Ordinals: A Comparative Analysis

While Bitcoin Ordinals focused on transforming satoshis into NFTs based on ordinal theory, Runes aims to simplify the fungible token landscape on Bitcoin. Both protocols reflect Rodarmor’s commitment to innovation within the Bitcoin ecosystem. Bitcoin Ordinals had introduced unique identification and tracking for satoshis, and Runes aims to bring similar levels of innovation to fungible tokens.

Ethical and Practical Considerations

Rodarmor raises ethical questions about the existence of such a protocol. He describes the fungible token landscape as a “near totally irredeemable pit of deceit and avarice” but suggests that Runes might draw users away from less-efficient schemes, thereby benefiting Bitcoin in the long run.

Future Outlook

The introduction of Runes opens up new avenues for discussion within the Bitcoin community. It remains to be seen how the protocol will be received, but its focus on simplicity and efficiency could make it a strong contender in the evolving landscape of Bitcoin-based fungible tokens.

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Tagged : Bitcoin / BITCOIN ORDINALS / CASEY RODARMOR / FUNGIBLE TOKEN / News / Nfts / RUNES / Utxo

MicroStrategy Acquires Additional 5,445 Bitcoins, Total Holdings Reach 158,245 BTC

by Blockchain NewsSeptember 26, 2023

Key Takeaways

MicroStrategy purchases 5,445 more Bitcoins for approximately $147.3 million.

The company now holds a total of 158,245 Bitcoins, acquired at an average price of $29,582 per Bitcoin.

The acquisition comes amid a period of relative price stability for Bitcoin, which is currently trading around $26,000.

Strategic Investment

MicroStrategy, a leading business intelligence firm, has further solidified its position as a significant Bitcoin investor by acquiring an additional 5,445 BTC. The announcement was made by Michael Saylor, the company’s co-founder and executive chairman, on X (formerly known as Twitter) on September 25, 2023. The acquisition was completed for a total cash payment of $147.3 million, averaging $27,053 per Bitcoin.

Regulatory Filing Details

According to a Form 8-K filing submitted to the United States Securities and Exchange Commission (SEC), the latest acquisition took place between August 1 and September 24, 2023. As of the latter date, MicroStrategy and its subsidiaries control approximately 158,245 Bitcoins. These assets were acquired at an average price of $29,582 per Bitcoin, inclusive of all fees and expenditures. The aggregate purchase price for all Bitcoin assets held by the company stands at around $4.68 billion.

Market Context

The acquisition comes at a time when Bitcoin prices have shown relative stability, hovering around the $26,000 mark for several weeks. After peaking close to $28,000 on August 29, the cryptocurrency hit a low of $25,000 on September 11. According to data from CoinGecko, the current market price of Bitcoin is $26,081, representing a 1.9% decrease over the last 24 hours and a 4% decrease over the past week.

Company’s Bitcoin Strategy

This latest acquisition reinforces MicroStrategy’s bullish stance on Bitcoin. Earlier in June 2023, the company purchased 12,333 Bitcoins for a total of $347 million, at an average price of $29,668 per coin. Notably, MicroStrategy reported its first profitable quarter since 2020 in Q1 2023, thanks in part to a one-time income tax gain.

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Tagged : #BTC / Acquisition / Bitcoin / Cryptocurrency / FORM 8-K / Investment / Michael Saylor / Microstrategy / News / SEC

NYDIG Report: Bitcoin Volatility Expected Around ETF Dates, Mt Gox Delays, and Fed Rate Impacts

by Blockchain NewsSeptember 23, 2023

Key ETF Dates Stir Volatility Expectations in Options Market

The options market is signaling potential significant price movements in bitcoin around crucial ETF dates, according to NYDIG weekly report. The forward volatility of at-the-money (ATM) options from October 13th to October 20th, 2023, has surged by 9.6 points. This data suggests traders anticipate a 5.5% single-day move in bitcoin’s spot price during this period. The SEC is set to respond to the BlackRock iShares Bitcoin Trust ETF by October 17th, 2023. Additionally, the SEC has until October 16th to address the Bitwise Bitcoin ETP Trust. Market data indicates traders are bracing for price swings, possibly due to an approval or denial. Another pivotal date is October 13th, the last day for the SEC to appeal the Grayscale case decision.

Mt Gox Delays Creditor Payouts to 2024

The Mt Gox bankruptcy trustee has postponed creditor payouts by a year, moving the deadline from October 31st, 2023, to October 31st, 2024. This delay extends the resolution of a significant event in crypto history, involving approximately 138K BTC, valued at roughly $3.7 billion at current rates. The industry has closely monitored the fund disbursement due to its potential market impact. The resolution has been pushed to 2024.

Fed Rate Policy Sends Ripples Through Financial Markets

The Federal Open Market Committee (FOMC) decided to maintain current interest rates this week. However, hints of a potential rate hike later this year caused asset prices, including stocks and bonds, to decline. Bitcoin initially dipped but ended the week unchanged, contrasting with the performance of stocks and bonds. Over the years, various macroeconomic factors have been proposed as influencers of bitcoin’s price. Yet, none consistently explain its decade-long price history. While some factors, like inflation expectations, may play a role in shorter time frames, bitcoin’s unique characteristics remain its primary price drivers.

Market Overview

Bitcoin’s price remained relatively stable despite weekly fluctuations. In contrast, equities faced challenges due to looming interest rate hike uncertainties. The S&P 500 fell by 2.3%, and the Nasdaq Composite dropped by 5.0%. The fixed income market also saw declines, with investment grade corporate bonds, high yield bonds, and long-term US Treasuries falling by 1.3%, 1.4%, and 3.0%, respectively. Gold’s price slightly increased by 0.4%, while oil declined by 0.6% after a recent rally.

Other Noteworthy News

Mt Gox announced a change in repayment deadlines.

Grayscale Investments is filing for a new Ether Futures ETF.

The NYDFS updated its virtual currency oversight.

The Lazarus Group is reportedly intensifying its crypto hacking efforts.

The U.S. SEC’s Crypto Enforcement Chief hinted that charges might extend beyond Coinbase and Binance.

Citi is developing new digital asset capabilities for institutional clients.

DTCC collaborates with Chainlink to bring capital markets on-chain.

Tether resumes its stablecoin lending and invests $420 million in cloud GPUs.

PayPal USD is now accessible on Venmo.

Upcoming Events

September 29: CME expiry

October 3: Valkyrie Bitcoin and Ether Strategy ETF effective date

October 13: SEC appeal deadline in Grayscale case

October 16: SEC’s response date for the first spot bitcoin ETF (Bitwise)

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Tagged : Bitcoin / Bitcoin Volatility / Etf / Fed / Mt. Gox / News / Nydig

Bitmain Commits $54 Million Investment in Core Scientific, Inc. Amid New Supply Contract

by Blockchain NewsSeptember 22, 2023

At the World Digital Mining Summit, Core Scientific, Inc. (OTC: CORZQ), a North American leader in blockchain computing data centers and software solutions, disclosed a significant investment from Bitmain, the globally recognized manufacturer of digital currency mining servers. Bitmain’s commitment amounts to $53.9 million, further cementing the bond between the two industry giants.

This collaboration will see Bitmain furnishing Core Scientific with 27,000 of its latest Bitmain S19J XP 151 TH bitcoin mining servers. The transaction involves a $23.1 million cash payment and an equity exchange worth $53.9 million in Core Scientific common stock. The equity’s per-share value will be finalized following a chapter 11 plan of reorganization, anticipated to gain approval in the upcoming fourth quarter.

Max Hua, Bitmain’s CEO, expressed his optimism about the strengthened ties with Core Scientific, praising their “professionalism, integrity, and commitment” to the Bitcoin Network’s growth. He emphasized the shared vision of both companies in fostering the expansion of the Bitcoin Network, especially as global bitcoin adoption surges.

Core Scientific’s history with Bitmain is deep-rooted. Since its inception in 2017, Core Scientific has managed over 600,000 Bitmain miners across its data centers. Presently, a staggering 99% of the 200,000 miners they operate, both owned and hosted, are Bitmain S19 models. Bitmain has also been a loyal hosting customer for nearly half a decade, entrusting Core Scientific with a significant portion of its mining equipment.

Adam Sullivan, CEO of Core Scientific, acknowledged the pivotal role Bitmain plays in their operations, stating, “Bitmain’s product quality, attention to service, and responsiveness are critical to our success.” He further highlighted the anticipated efficiency boost the new miners would bring, especially in light of the upcoming halving event.

By the close of 2023’s fourth quarter, Core Scientific aims to integrate and activate the 27,000 units, potentially adding 4.1 exahashes to its self-mining hash rate. Additionally, both parties have consented to upgrade older Bitmain miners at Core Scientific’s facilities to the newer S19J XP models, promising an even greater hash rate increment.

As of the end of August 2023, Core Scientific boasted an impressive energized hash rate of 22.0 exahashes per second, spread across its data centers in five U.S. states. Their self-mining operations yielded 965 bitcoins in August alone, with a cumulative 9,755 bitcoins mined year-to-date, surpassing any other publicly listed bitcoin miner in North America.

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Tagged : Bitcoin / Bitmain / Core Scientific / Mining / NEW SUPPLY CONTRACT / News

Unchained Partners with Build Asset Management for Bitcoin-Backed Credit Fund

by Blockchain NewsSeptember 19, 2023

Unchained, a prominent financial service provider for bitcoin holders, has unveiled a strategic partnership with Build Asset Management, the sponsor of Build Secured Income Fund I. This collaboration is set to focus on investments in Unchained loans.

Joe Kelly, co-founder and CEO of Unchained, remarked, “This partnership will allow more of our borrowers to unlock the value of their bitcoin.”

Since its inception in 2017, Unchained’s lending division has successfully originated loans exceeding $500 million, with no recorded dollar losses. The company attributes its stellar loan portfolio performance to its collaborative custody solution, the round-the-clock liquidity of assets, and the transparency provided by bitcoin’s blockchain.

Data reveals a significant 170% surge in Unchained’s lending activities from Q1 to Q2 2023. This uptick came in the wake of the 2022 crypto market contagion, a period marked by the bankruptcy of several lenders, resulting in losses surpassing $5 billion in customer funds. Additionally, bitcoin’s value plummeted by over 65%. Despite these setbacks, the data underscores the sustained trust in Unchained’s platform and bitcoin as a viable asset.

Established in 2016, Unchained ranks among the top 10 bitcoin platforms based on secured assets. The company has empowered numerous individuals and businesses to have genuine ownership of their wealth through bitcoin keys. Unchained’s unique collaborative custody model offers clients access to financial services while retaining the advantages of self-custody.

Build Asset Management, LLC, also recognized as Build Asset Management or GetBuilding.com, is an investment adviser registered with the U.S. Securities and Exchange Commission. Founded in 2018, Build’s primary objective is to devise income and risk mitigation strategies in response to the evolving investment landscape.

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Tagged : Bitcoin / BITCOIN-BACKED / BUILD ASSET MANAGEMENT / CREDIT FUND / News / UNCHAINED

Coinbase to Integrate Bitcoin’s Lightning Network: A Deep Dive

by Blockchain NewsSeptember 14, 2023

Coinbase has announced a significant move that could revolutionize Bitcoin transactions. CEO Brian Armstrong took to Twitter to reveal that Coinbase plans to incorporate the Lightning Network (LN), a secondary payment layer aimed at boosting Bitcoin’s transaction efficiency and cost-effectiveness. This decision highlights Coinbase’s dedication to user experience and emphasizes the critical role of the Lightning Network within the cryptocurrency sphere.

Coinbase CEO Brian Armstrong’s Announcement

In a tweet, Armstrong expressed,

The team did a great job digging into this, and we’ve made the decision to integrate Lightning. Bitcoin is the most important asset in crypto and we’re excited to do our part to enable faster/cheaper Bitcoin transactions. Will take some time to integrate so please be patient.

Viktor Bunin, who is spearheading the integration at Coinbase, echoed Armstrong’s sentiments, stating,

Friends, I’m happy to say that I’m leading up this effort. DM me if you’d like to grab some time to chat Lightning support at @Coinbase.

Delving into the Lightning Network

The Essence of Lightning Network

The Lightning Network operates as a “layer-2” payment protocol atop the Bitcoin blockchain. Its primary objective is to facilitate rapid transactions between nodes, positioning itself as a remedy to Bitcoin’s scalability issues.

The Significance of Lightning Network

Scalability Solution: Bitcoin’s pioneering status in the crypto world came with scalability challenges. LN addresses these by enabling off-chain transactions, which are later consolidated on-chain.

Cost and Speed Efficiency: With the main Bitcoin blockchain often incurring high transaction fees, especially during peak times, LN provides a cost-effective alternative. Additionally, its ability to process transactions almost instantaneously offers a stark contrast to the sometimes prolonged confirmation times on the main blockchain.

The Mechanics of LN

The foundation of the Lightning Network is “payment channels.” In essence:

Two entities establish a payment channel, committing a specified Bitcoin amount.

They can then execute an unlimited number of off-chain transactions.

Upon completion, the final balance is updated on the main Bitcoin blockchain, allowing for the channel’s closure.

Implications for the Crypto World

Coinbase’s decision to integrate the Lightning Network is indicative of LN’s escalating importance. As its adoption proliferates:

Bitcoin might become a preferred choice for microtransactions.

The main Bitcoin blockchain could witness reduced congestion, translating to swifter and more economical on-chain transactions.

The allure of diminished transaction fees and expedited processing might incentivize more businesses to embrace Bitcoin as a payment avenue.

In summation, the Lightning Network isn’t merely a technological innovation; it’s a strategic instrument poised to influence Bitcoin’s future and its integration into daily transactions. With industry giants like Coinbase acknowledging its potential, LN is set to play a crucial role in propelling cryptocurrencies into mainstream acceptance.

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Tagged : Bitcoin / Coinbase / Lightning Network / News