There is a lot of fanfare about Bitcoin's new Lightning Network, especially in the 'Crypto Sphere' on Twitter and other social media, as well as podcasts and other shows on social sharing platforms such as YouTube. But the real question here is, does the world really need it? 


Bitcoin Core (BTC) in it's current state is essentially unusable as a medium of exchange for small transactions due to it's block times and high fees. The beaten and long-ago dead horse of "No one is going to pay a $5 fee for $2 coffee payment" is finally being addressed. Hence, the advent of the Bitcoin Lightning Network.


It's a layer 2 solution that has been in development for several years. Bitcoin's lightning network works essentially as a Bitcoin Core side-chain. It creates a payment channel off-chain, meaning off of the main Bitcoin Core (BTC) blockchain. Two participants create a ledger entry on the LN blockchain which requires both participants to sign off on any spending of funds. Both parties create transactions which refund the ledger entry to their individual allocation, but do not broadcast them to the blockchain. 

They can update their individual allocations for the ledger entry by creating many transactions, spending from their current shared ledger. Only the most recent version is valid, which is enforced by blockchain-parsable smart-contract scripting.

In summation, two people open up a payment channel off-chain (connecting to Lightning Network nodes people can run from home) and do as many transactions as they want between each other. When they are done, it gets broadcasted to the main chain as only one larger transaction instead of a bunch of small ones. This is supposed to address the fee issue.

You can read their whitepaper for all the in-depth technicals but here I just boiled it down for public consumption.  And if you still can't understand my ranting, you can simply check out this video below which explains it with even simpler illustrations.

There are some limitations with the Lightning Network as well. The payment channels would have to be pre-funded, so there are some liquidity issues arising from that as well. Plus, the whole thing requires special custodial wallets to work. If you want to close the payment channel and there is a remaining balance, you can't just transfer the funds back without doing some special conversion process first, which kind of bring me to my original question "Does the world really need it?"

Bitcoin was and still is revolutionary. Bitcoin doesn't need a second layer solution, it never did. Not the original Bitcoin protocol anyway as envisioned by Satoshi Nakamoto and outlined in the Bitcoin Whitepaper. Bitcoin SV, also called by it's abbreviation 'BSV' is the only implementation of Satoshi's creation that is unmolested by it's core development team. Bitcoin SV is what BTC was supposed to have been but unfortunately strayed away from the original Satoshi vision, opting for the shadows of the Darknet and home-based Raspberry Pi nodes rather than the light-speed networks of global business enterprises. 

Bitcoin SV already does micropayments. Much better, cheaper and faster than the Lightning Network does today. This is done daily on YouTube's Bitcoin SV Channel. They do a segment called "Ding some Dong" in which they send Vietnamese Dong to the show's viewers. The Vietnamese Dong's exchange rate is 23,201 Dong for every $1 (let's round down to 20,000 for this example). 

This means, that to send 10 Vietnamese Dong you would essentially be sending 1/2,000th of a US Dollar. Less than 1/10th of 1 cent ($0.001). Not only that, but Bitcoin SV it does these micropayment on-chain, not off-chain routing though small nodes operated by your teenage neighbor. Someone once said "Come on! You can't run the global economy with Raspberry Pis! Are you kidding?"

I would have to agree with that sentiment as the original Bitcoin didn't need any of this. It doesn't need the solution, it is the solution.