The Lightning Network is a game changer... Is the era of holding Bitcoin over?

Bitcoin (BTC) has long been considered "peer-to-peer digital money," according to its creator Satoshi Nakamoto's vision. However, over time, the cryptocurrency has transformed into a store of value, as investors preferred to hold onto it rather than use it for everyday transactions.

Nevertheless, a new report by Breez, a company focused on scaling Bitcoin, has revealed a potential return of Bitcoin as a digital currency, thanks to the Lightning Network.

Lightning Network: The Future of Fast and Cheap Bitcoin Payments

The report indicates that the Lightning Network, a second-layer solution designed to accelerate Bitcoin transactions and reduce costs, has made the cryptocurrency more efficient as a medium of exchange. With increasing use cases of the network, from purchasing luxury goods and retail to global remittances, over 650 million people worldwide can now access Bitcoin, which bolsters its transformation from a store of value to a practical means of payment.

Micropayments: A New Revolution in the Digital Economy

Thanks to the Lightning Network, users can now make very small payments efficiently, enabling new use cases such as:

• Pay-per-use access to digital content for a short period.
• Quickly and easily buying a cup of coffee at local cafes.
• Conducting international money transfers with low fees and high speed.

How was the 650 Million User Estimate Made?

The report relied on databases from major Bitcoin trading platforms such as Coinbase, Binance, and Paxful. Binance alone has approximately 260 million users, reinforcing the idea that millions are now able to use Bitcoin in their daily transactions.

Bitcoin in Emerging Markets: Is It the Ideal Alternative to Fiat Currencies?

In developed countries, where fiat currencies are stable and reliable, users tend to view Bitcoin as an investment asset. However, in emerging markets, where inflation and monetary instability pose significant challenges, Bitcoin emerges as a practical alternative to fiat currencies.

For instance, the Pick n Pay chain, one of the largest retailers in Africa, has adopted the Lightning Network to accept Bitcoin payments. Karel van Wyk, the founder of MoneyBadger, who contributed to implementing this technology, explained:

“Lightning payments are faster than any other method at point-of-sale, even faster than card payments, with lower fees than credit or debit cards.”

Remittances: A Revolution in Cross-Border Money Transfers

Alongside local uses, the Lightning Network stands out as an effective tool for global money transfers. According to Bernard Parah, CEO of Bitnob, the network allows money to be transferred as easily and quickly as buying a cup of coffee in New York, making it an innovative solution for individuals in developing countries dependent on remittances.

Bitcoin vs. Stablecoins: Which Is Better?

Stablecoins like USDT and USDC have long been considered among the most widely used cryptocurrencies, especially for remittances and trading. Data shows that transaction volumes using stablecoins last year surpassed the combined transaction volumes of Visa and American Express.

However, the report warns that stablecoins do not represent a true innovation, as they are not significantly different from traditional fiat currencies due to their ties to central governments and traditional financial systems. According to the report, Bitcoin, unlike stablecoins, cannot be devalued or subjected to regulation by government decree.

Bitcoin: A Digital Currency or Digital Gold?

While the report notes that 650 million people have access to Bitcoin via the Lightning Network, the vast majority do not use it as a daily digital currency, preferring instead to hold it as an investment asset akin to digital gold.

Nonetheless, the report highlights that Bitcoin has indeed become a practical means of payment, as it is used daily in some regions to purchase products, send donations, and conduct seamless financial transactions.

Conclusion: Will Bitcoin Return as a Digital Currency?

While Bitcoin still maintains its status as an investment asset, technological developments, especially the Lightning Network, may pave the way for its return as a daily means of payment in the future. With increasing acceptance by businesses and stores worldwide for Bitcoin payments, we might witness a gradual shift from viewing it as digital gold to utilizing it as a true electronic currency.

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