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Stellar Adopts the Lightning Network in a Flash

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Stellar is gaining ground in the cryptocurrency sphere, with an increasing number of major partnership announcements. However, Stellar co-lead Jed McCaleb has admitted that the blockchain project may suffer from scalability issues in the near future. If all of these partners use the Stellar platform to its maximum potential, the system could see slowdowns and traffic jams. Bitcoin saw the same issues until they adopted the Lightning Network protocol. The clever code base for the Lightning project helps circumvent the inherent limitations of traditional blockchain tech. Using this workaround, transaction volume increases exponentially and ensures that traffic is a near non-issue.

Stellar Signs on to the Lightning Network

In an attempt to curtail the possibility of slowdowns, Stellar announced that they will be integrating Lightning technology. This early adoption ensures that scalability issues removal before they can become a problem. This type of forward facing pre-planning speaks volumes about the foresight of Jed McCaleb and his Stellar team. It is inherently easier to tackle a perceived problem before it has an impact on the blockchain itself.

Messaging app Kik recently abandoned the Ethereum blockchain due to scalability issues. Instead, they will be building their transactions on the Stellar platform. Although the platform would currently be unable to fully support Kik’s plans, Lightning could change that. Lightning Network technology would allow the Stellar system to support not only Kik’s ambitions but also those of partner IBM. IBM intends to use the Stellar network to support remote banking projects, another potentially resource draining partnership.

How Does the Lightning Network Work?

Bitcoin’s block size and transaction volume became an issue at the end of 2017. As trading volume increased to a previously unheard of amount, the blockchain became bogged down. Transactions not only took obscene amounts of time to complete, but the priority system created extremely high fees. The Lightning Network project foresaw this situation and began development over a year before the spike. Their project relies on the ability to create an additional payment layer on top of the parent blockchain.

This second layer is created through inter-person connections. Anyone involved in transactions opens a channel directly to their receiver. Subsequent transactions by either user open additional channels that can use the original as throughput to complete transfers between disparate users. In this way, transactions complete without establishment on the public blockchain. When a channel closes at the request of a participant, the transactions proceed to the public blockchain.

This allows the second layer to handle the vast majority of the transactions, sparing the public blockchain from that traffic. For legacy coins like Bitcoin, the Lightning Network is a sorely needed upgrade that ensures the continued feasibility of the cryptocurrency. For new projects like Stellar, it offers an opportunity to avoid the problem before it appears.

Atomic Swaps on the Lightning Network

One of the most attractive aspects of Lightning Network adoption is the ability to make trades across blockchains. This would allow a user that owns Stellar Lumens to theoretically trade them directly for Bitcoin – without a third party exchange. This creates a new form of liquidity that was previously infrequent or directly unavailable in the cryptocurrency world.

This functionality is a result of smart contracts. These contracts are executed within a certain time frame, dependent on the currency accurately arriving. If that fails to happen, the transaction is canceled and all currency returned to its original owners. The trust-less factor of blockchain based smart contracts avoids any fraudulent transactions. In this way, transactions across chains can be as safe and secure as those within a single chain.

Stellar Prepares for the Future

The Lightning Network is one of the most significant upgrades to blockchain functionality since the original release of the technology. As such, the cryptocurrencies that adopt this platform early will rightfully appear as forward thinking, progressive and invested in the success of their product. These are strong indicators of long-term validity for investment. Stellar is one of the first, continuing their commitment to banking the unbanked while still producing value for their investors. Stellar is challenging other top cryptocurrencies, jockeying for a top slot by market cap. Given their fairly recent release, their performance is impressive – and with decisions like Lightning adoption, likely to continue.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of John Fowler via Flickr

Bitcoin

Investors Beware: Another Large Bitcoin Crash Might Be Coming

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The crypto prices have surged quite high in the last few months. Of course, their progress is nowhere near the one seen in 2017, but they appear to be getting there, one day at the time. However, things might not be as simple as that, and according to recent performance — it is more than possible that a major Bitcoin crash is incoming.

The fact is that cryptos saw a massive amount of growth in a very short period. Bitcoin itself more than doubled its price in only two months. Now, the rally is starting to crash in on itself, and the coin is already about $1,000 lower than last week. If such development does come to pass, a lot of people will experience quite large losses, although experienced investors might find some opportunities, and leverage in order to enhance their holdings’ long-term value.

For example, Bitcoin dominance is expected to crash very quickly, which will work in favor of quite a lot of altcoins. While this does not seem to be the best time to invest in BTC, altcoins are another story, and diversifying a portfolio now might end up being very profitable in days to come.

Bitcoin behavior mirrors the pre-bear market situation

The crash that analysts are predicting right now comes as a direct consequence of all the hype that has been building up in…

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Altcoins

Top 3 Coins to Buy Before They Go Big

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Crypto bulls are back, that much is clear. The long-lasting, harsh crypto winter is gone, and the new era in digital currency sector opens up some rather interesting opportunities. With many more bull runs expected to come in months ahead, a lot of coins are likely to blow up and maybe even hit new all-time highs, although that still remains purely theoretical.

On the other hand, the fact is that numerous coins are seeing prices that were not achieved since early 2018, and the overall momentum remains bullish. With that in mind, even if new records do not come for a very long time — chances are that many of the coins will blow up enough for investors to see some serious gains in months to come. As a result, investing in some of these coins now might be a very profitable decision, for those who have the patience to wait a few months. Here are some of the projects believed to have the greatest potential to go big in the second half of 2019 and beyond.

1. TRON (TRX)

Putting TRON on the list should not really surprise anyone, as the project constantly comes up with new project updates, partnerships, and alike. It also constantly breaks records, as is becoming one of the biggest players in the dApp and smart contract development sector.

In the past few…

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Blogs

Can Crypto Credit Cards Disrupt the Fight Against Financial Crime?

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It is commonly known that the world of finances has the biggest problem with the crime of all existing industries around the world. It has been so throughout history. While the financial world has evolved, so did the criminal activities, and they continue to be an issue. With the arrival of cryptocurrencies, many were hoping that financial crime might be disrupted. However, for now, at least, it appears that cryptos themselves cannot find a way to resolve issues such as international money laundering.

In fact, when it comes to money laundering, the crypto sector appears to be the weakest link, especially because of the nature of digital currencies. The anonymity that cryptos are being praised for means that anyone can get a payment from an unknown source from anywhere in the world. This method can then be used for financing drug trafficking, cyberattacks, terrorists, and more.

Until recently, it was not easy for bad actors to make use of cryptocurrencies obtained for illegal purposes. The number of merchants willing to accept the coins was low, and criminals were forced to find a way to exchange crypto into fiat currencies. However, this came with a set of issues, such as taking foreign exchange risks and then sending the money through wallets and exchanges to a banking system that would allow withdrawal. The banking account was the biggest obstacle here,…

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