The Bitcoin and crypto market correction continues, as the extended pullback leaves crypto investors doing their best to determine where the trend is headed next. During this time, sentiment in the market has been mixed because, well, frankly, the news and developments don’t seem to accurately reflect market conditions.

This week, updated inflation data was released and, as expected, was above economic forecasts. National inflation is the highest it’s been in thirteen years. The consumer price index rose 5.4% in June, with another 0.5% increase forecast for the coming month. One would expect Bitcoin to rise on this data, however, concerns are now rising over the government withdrawing its quantitative easing policies to limit inflation, leaving investors waking up in a cold sweat.

So while we wait to see how the Fed will respond to rising inflation, we know America is experiencing the pressure of an economic squeeze it hasn’t felt in a long time–when demand outweighs supply on what were otherwise very commonplace and crucial goods. Things like cars, lumber, gas, milk, continue to soar in price, and housing is up a whopping 10.8%.

And while Bitcoin continues to be range-bound in its price action, it continues to show promise both in its fundamentals and adoption, while becoming increasingly scarce. During the dip, thousands of Bitcoin were seen on-chain leaving exchanges, slowly constricting the current supply.

In fact, the Bitcoin network itself also set a new record, passing the 13,000 node mark for nodes in the network the first time–thanks to the Lightning Network. The Bitcoin Lightning Network’s growth has gone completely parabolic, growing 20% just this month, across more than 56,000 channels. (CoinDesk)

Layer 2 solutions, which are blockchain networks that sit on top of Layer 1 blockchains to accelerate transaction speeds, are making us rethink the possibilities of Layer 1 networks. The Lightning Network might serve as Bitcoin’s golden ticket. Lightning promises a fast and efficient way for people to transact Bitcoin while maintaining the security and decentralization of its core blockchain layer.

Lightning consists of a network of nodes that enable the rapid transfer of peer-to-peer transactions across the network. Transactions processed on Lightning Network channels are turned into a single transaction that are then settled on the Bitcoin core network.

Currently, the Bitcoin network can handle around seven transactions per second. The Lightning Network promises to increase these numbers through a secure, trustless system that also lowers transaction costs.

These features are crucial as we now see Bitcoin being adopted as more than just a speculative investment vehicle. With El Salvador exploring ways to utilize Bitcoin as a legal tender, they are looking to implement the Lightning Network for ease in transaction costs for modern-day commerce.

Maximizing the efficiency of the Bitcoin network and the widespread adoption of Lightning, may be the very thing that gives BTC the major jump across the chasm for mainstream adoption. Fast Bitcoin, plus limited supply, is a perfect storm.


Top Market Movers as of July 16

  • Hedera Hashgraph (HBAR) +8%
  • Enjin Coin (ENJ) +7%
  • Decentraland (MANA) +3%
  • Chiliz (CHZ) +3%

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Cointelegraph > “Bitcoin network node count sets new all-time high”

Coindesk > “What is Bitcoin's Lightning Network?”


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