Elon Musk: Lightning Can Solve BTC’s Scaling Problem
2 min read
Tesla and SpaceX CEO Elon Musk, BTC’s former posterboy and now its number-one persona non grata, said that the BTC network could meet rising demand if its users adopted the Lightning Network, a payments network that makes BTC transactions quicker and cheaper.
“BTC hashing (aka mining) energy usage is starting to exceed that of medium-sized countries. Almost impossible for small hashers to succeed without those massive economies of scale,” he tweeted today. “For now, Lightning is needed.”
Achieving truly decentralized finance – power to the people – is a noble & important goal.
Layer count depends on projected bandwidth & compute, both rising rapidly, which means single layer network can carry all human transactions in future imo.
For now, Lightning is needed.
— Elon Musk (@elonmusk) May 21, 2021
Lightning is a piece of software that processes BTC transactions outside of the BTC blockchain to lighten the load on the network.
Without Lightning, it currently costs an average of $13 in fees and takes 14 minutes to move funds across the BTC network.
With Lightning, moving funds costs around one satoshi, the smallest unit of a BTC (equivalent to 100 millionth of a BTC), and transactions are near-instantaneous.
Silicon Valley-based Lightning Labs started building Lightning in 2016. The company counts Twitter and Square CEO Jack Dorsey among investors. A protocol launched in beta in 2018.
BTC hashing (aka mining) energy usage is starting to exceed that of medium-sized countries. Almost impossible for small hashers to succeed without those massive economies of scale.
— Elon Musk (@elonmusk) May 20, 2021
Critics argue that Lightning sacrifices decentralization, since some of the computational work takes place away from the main BTC blockchain.
“Achieving truly decentralized finance – power to the people – is a noble & important goal,” said Musk, in response to BTCSession, a crypto YouTuber who had asked whether Musk had considered whether Lightning sacrificed on decentralization.
Musk, who slammed BTC due to its impact on the environment and reliance on Chinese miners, is looking at cryptocurrencies that use less than 1% of BTC’s energy consumption.
Dogecoin developers claim that the Tesla CEO has offered funding to improve the network, which uses a fraction of BTC’s energy consumption.
While Musk can move the market with his tweets—he contributed to a market meltdown that slashed $500 billion from the market earlier this week—his comments on Lightning didn’t affect BTC’s price, which remains a steely $40,000.
