Lightning Network: how I traded the securities market for Bitcoin

I'm an avid player in the markets.observation of the rise and fall of prices forassets who are constantly trying to analyze the cause and consequences of each movement on earth. When I first understood the true nature of the Bitcoin protocol, I became obsessed with its price.

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Rabbit holes

I started my way into the Bitcoin rabbit hole in 2016year. I traded US Treasury bills and other interest rate products for one institutional asset manager. This was my first major trading job. For the first time in my life, I got access to the brightest minds on Wall Street. We can say that in 2016 I began to descend along the rabbit hole of banks.

The craziest thing on the rabbit holeBitcoin and banks are the difference in scale. She is unimaginable. Then the capitalization of Bitcoin was less than $ 20 billion. I was a relatively small player in the securities market. My treasury turnover was $ 20 billion in just a few months. The first amount seemed to me too small, and the second - too large. I knew that in order to understand the scale of the global financial system, I needed to learn to think in trillions.

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Numbers game

I will never forget the moment I realizedtrillions concept. We, with my familiar trader and close friend, played our daily game with numbers behind the workplace. The question was: “How much money went through the Federal Reserve system last year?” I thought for a minute, made the calculations in my mind and said: “Three quarters of a quadrillion.” The answer was 767 trillion dollars. I was mistaken for a huge 17 trillion dollars, but somehow this amount turned out to be less than 3%, which can be mistaken, and a thousand times more than Bitcoin's capitalization. Bitcoin was just too small, less than $ 20 billion, and there were enough zeros in the dollar system to turn my head around. It was clear that these numbers would change over one to two decades. I began to think about life after trading activities and realized that, perhaps, it will be associated with Bitcoin.

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Bitcoin is Digital Gold

I looked at treasuries, stocks, gold,oil, currencies and tried to understand how they are interconnected. I have seen Bitcoin play the role of gold and sustainable money in the digital future. I was interested in the schedule for the release of new bitcoins and the theory of games with increasing complexity. I began to study this subject and quickly stumbled upon a discourse about an update called SegWit that enabled the use of the Lightning Network technology.

The first time I used bitcoins, Itracked the status of a transaction in the block explorer. I immediately understood Bitcoin’s work process very well - it was great. Of course, the creation of the first block took half an hour, during which my heart jumped out of my chest (of course, without reason). After creating a few more blocks, I felt an incredible sense of security, but this process took an entire hour - absolutely impractical for any kind of daily standard transactions. I realized that Bitcoin is digital gold, but it takes weeks to transport gold on ships across the ocean, and it took about an hour to complete the operation with bitcoins. This is an incredibly powerful and revolutionary phenomenon that extends the rights of people. But this is not a worldwide "currency."

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Lightning Network Turns Bitcoin Into World Currency

Lightning Network Technology Forever ChangedBitcoin thanks to instant operations. In the Lightning Network, transaction processing is independent of block confirmation. The Lightning architecture consists of instantly processed financial arrangements protected by a call option or equity transaction. The Lightning Network significantly increases the speed of Bitcoin, increases the number of processed transactions by several orders of magnitude and, most importantly, marks a new wave of Bitcoin innovations.

The very concept of "streaming money" makessoftware developers stall. Some of the existing ways to apply this technology amaze me. My fascination with Bitcoin began with its release schedule, but Lightning technology simply left me no choice. I decided to devote my intellectual capabilities to the Lightning Network technology, because in the history of mankind there was no currency of such a scale that would be an asset for savings and a medium of exchange. This game is worth the candle.

I took the first step and am now ready to dive completely

After years of trading securities and conductingdouble life as a trader and Bitcoin fanatic, it's time to fully embrace Bitcoin. In 2018, the community happily embraced me and my Lightning Network Reference Rate idea. But it wasn't until this year that I met the OpenNode team in downtown Los Angeles, who were located just a few blocks from where I traded treasury securities. There was an immediate chemistry between us because we had something in common: absolute confidence in the Lightning Network and its role in popularizing Bitcoin.

I told OpenNode about my solution: I wanted to popularize the well-known set of technologies LNP / BP (Lightning Network protocol and Bitcoin protocol), as happened with the universal TCP / IP complex (transmission control protocol and Internet protocol), which is the basis for Internet infrastructure around the world. Fortunately, the team became interested in my idea.

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Lightning is the beginning

The speed of development of Lightning technology sinceits appearance last year is gaining incredible momentum. It amuses me when skeptics say that the bandwidth and growth of the Lightning Network have slowed down due to randomly selected public channels. But the Lightning Network is not a public registry, not Bitcoin. It is rather a private registry, so it cannot be analyzed in the same way. Any attempt to analyze the growth of the Lightning Network from the outside is pointless.

Also, all these financial media ideas aboutthat Bitcoin is just digital gold is already out of date. These people do not understand the technical side of the Lightnhing Network or do not know at all about the existence of this technology. Today, Bitcoin can work at tremendous speed, which precious and very heavy metal can never.

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OpenNode carries the torch

OpenNode doesn't need to guess ifBitcoin is a store of value or exchange. We know that he possesses these two qualities. We know that they are embedded in Bitcoin. We conduct a lot of transactions through the Lightning Network, but we also conduct many transactions and in the main blockchain. We don’t have to wonder if people want to use an affordable solution. I asked the CEO and co-founder of the company, Afnan Rahman, about his biggest surprise since the opening of OpenNode. He replied: “I was surprised how quickly we earned the trust of the community, even among the most avid bitcoin miners that I don't want to name.”

Now we are actively blogging and are happy totalk about our next achievement: OpenNode Research. Our first report will be released in the first quarter of 2020 and will describe Bitcoin as a transactional currency. Next year, e-commerce will exceed $ 4 trillion. Our mission is to determine how much of this amount we can process using OpenNode. This task is at least difficult, but it motivates us to destroy one of the biggest myths about Bitcoin, that it is only a means of saving and cannot be a means of exchange. Bitcoin has these two qualities, and we will be happy to show you why this is so.

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