BitMEX Report: Bitcoin Lightning Network requires new types of investors

the researchers have looked at the Bitcoin Lightning Network in more detail. Apparently, Lightning Networks are intended to be more scalable than.

By Patrick Pehl
At the 2. April 2019BTC$4.777,33 15.54%part Facebook Twitter LinkedIn xing mail

Who does not remember, as a large Bitcoin-Hype around the turn of the year 2017/2018, the transaction prices exploded and the transactions waited on for days in the Blockchain. As a response to the Push for the development of the Bitcoin Lightning Networks. The Lightning Network is a network of different Payment Channels. This can be thought of as vessels, the one filled with Coins or outsources.

After a defined period of time, the network sealed the vessel, and writes the corresponding Bitcoin amount. The sealed transactions, the network feeds now as a Whole in the Blockchain, thus causing only one transaction. This is to keep the size of the Blockchain smaller and crypto-currencies make everyday.

BitMex recognizes the Potential of Bitcoin Lightning Network

However, there were always concerns about the scalability of the network. These concerns have now been in an essay by the research Department of the Bitcoin Mercantile Exchange, short BitMEX investigated. A focus was on the "market dynamics" of the Lightning Networks (LN), in relation to the transmission fees. They also viewed the financial incentives, which result from the operation of LN-Nodes.

Currently, capacity constraints are a real gold mine for the operators of the Nodes, as the cost for a time acceptable Routing of transactions to rise. The disabled, ultimately, the entire financial flow. In the long term, the research team of BitMEX is of the view that competition is the main driver for market prices and charges for the processing of LN-based transactions.

The researchers say in their report:

While the returns on Investment don't look for the providers of the Nodes from Lightning Networks and convincing, we see in this business model, with the structure of the network, a potential.

According to the market analysis of BitMEX low barriers to entry can lead to lower fees for LN users, but not to Win on the side of the Node operators. Writing the statement of technical analysts, which claim that the Routing is an unsolved Problem in computer science, the researchers:

So we are not really in agreement.

The research team from BitMEX argued that the solution to the current Routing Problem from Lightning networks is to find the optimal paths between the channels.

It is an economic Report,

A key point is that investors generally focus on high yield high risk.

the authors note. It is, therefore, a fundamental Consideration is to keep the Routing fees compensated. This requires a new type of Investor, with little risk and resulting low yields satisfied. Further, the authors allow themselves to get carried away, that to promote, in the sense of the overall market in low fees. The operator of the Routing-infrastructure mandatory to be able to less revenue to generate.

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