HOST: LANCELO SCHWARTZ
TOPIC: CRYPTO CURRENCY
FOCUS: BITCOIN HARD FORK (LIGHTNING NETWORK)
TIME: 10:00 GMT
This is going to be a very simple and interactive lecture
Members are free to communicate directly via http://t.me/tradewithlancelo
First of all we will start by explaining the concept of HARD FORK
With reference to Investopedia
DEFINITION of ‘Hard Fork’
As it relates to blockchain technology, a hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions valid (or vice-versa), and as such requires all nodes or users to upgrade to the latest version of the protocol software. Put differently, a hard fork is a permanent divergence from the previous version of the blockchain, and nodes running previous versions will no longer be accepted by the newest version. This essentially creates a fork in the blockchain, one path which follows the new, upgraded blockchain, and one path which continues along the old path. Generally, after a short period of time, those on the old chain will realize that their version of the blockchain is outdated or irrelevant and quickly upgrade to the latest version.
A hard fork can be implemented to correct important security risks found in older versions of the software, to add new functionality, or to reverse transactions
Its no longer a news that nearly every forex or crypto trader believes that bitcoin will be the currency of the future.
But there again Bitcoin currently have a lot of issues
1. high transaction fees
2. inavailability of sending low amount or transaction of less than 30$
3. scalling errors
4. delayed transaction
5. too many confirmations
6. high miners fee or blockchain explorers fees.
At the end of this lecture im going to send a detailed video about this as well
Due to this problem the bitcoin community decided to tackle this by creating the hard fork bitcoin lightning network.
Lightning bitcoin is not a new coin please note its a network just like the usual old bitcoin blockchain.
Remember what i said earlier about the hard fork, New rules are created and adopted
although some still work with the old rules till they get outdated.
The Lightning bitcoin network is the new fork or new rules of the bitcoin segwit2X
i’m trying to be as plain as possible to avoid much use of terms.
The lightning Bitcoin Network is not going to destroy the usual blockchain network!
NO! NO!! NO!!! NO!!!!
The lightning bitcoin is to reduce the load on the blockchain network, its like the blockchain leverage system, currently the bitcoin system processes 7 transactions only per seconds and this is the reason we experience long delays in making transacionssimetimes up to a week or 3days etc. With the lightning network bitcoin would be able to process over 10,000 transactions per seconds
YEah thats amazing
Now how is this going to be achieved???
Lets say you Burger wants to purchase Coffee From the Coffee Shop
using the old method
Mr Burger would have to make a bitcoin transafer which may require 2 or 3 confirmation before final delivery, this may take up to a day and worst of all burger may end up spending X2 of the actual cost of coffee due to transaction and miners fees.
But with the lightning network
Burger wants a cup of coffee
instead of burger transacting btc directly with the blockchain network
Burger creates a channel with the coffee shop
the channel serves as an offchain network
Burger creates a channel with the coffee shop and deposits some btc there in his linked channel
also the coffee shop deposits or doesnt irrespective if the coffee shop policy provides a refund or not.
now when burger wants to pay for his coffee.
Burger doesnt need to wait for the much confirmations or delays or any extra fees
all burger has to do is sign the transaction
and instantly the amount of btc worth the coffee would be deducted from mr burger to the coffee shop.
no extra fee obtained and instant
now after the transaction burger still has some btc left in is balance sheet in the channel while the cooffee shop gets the requird fees
subsequently as burger continues to buy coffee he keeps on making payment with the offchain or trough his channel.
This process makes Bitcoin transaction super fast
Now this are the advantages of the lightning network
1. transactions are made instantly
2. No exxtra fees incurred
3. Refund policy makes it more secured. users and business men feel more safe with this
4. multiple channels can be opened for different purpose
5. up to 10 friends can use one channel
Currently the lightning network has been released but under a test phase classified as Proof of Concept when this is finally made possible to the bitcoin community.
the value of bitcoin will soar high as more industries would begin to accept BTC as an instant point of sales, more people would make more secured transactions with bitcoins
most online mall would accept it as a means of payment due to the refund policy which will be added to the lightning network and believe me i see bitcoin hitting 50k before the Mid-Half of 2018
I expected someone to ask this ”What would be the effect of this fork on Alts coins???
well if any of you have been mining bitcoins or any cryptocurrency or probably been following the cryptos for a while you must have observed after every Hard or Soft fork theres usually a very high pump of bitcoins
Those of you who have endured past chain splits are aware of what usually happens when there’s a split from the Bitcoin network. Ordinarily, the community complains, reddit.com, medium.com, and twitter.com become platforms for soapbox speeches, and a lot of trash is talked by factions within the community.
However, have you noticed the other events that are correlated with a chain split? Once a chain splits, you suddenly own a number of split tokens equivalent to the number of tokens you had on the Bitcoin network. This is because the new chain will be an exact copy of the Bitcoin Blockchain up until the point where the fork occurs.
If the wallet you use supports the forked chain’s software, you will be the owner of two digital tokens: Bitcoin and the Forked Chain Token. In our example we will use Bitcoin Cash (BCH) as the forked token. When the Bitcoin Cash chain forked off of the main chain, owners of Bitcoin became owners of an equivalent amount of Bitcoin Cash. This is because the chains were identical until the fork occurred. If you owned 10 BTC before the split, then you owned 10 BTC and 10 BCH after the split.
This is where the slope becomes slippery. People or organizations with unfathomable amounts of money can use forks as an opportunity to extort both the Bitcoin network and the forked network for enticing capital gains when a fork occurs.
Now usually the pump occurs as a result of increase in the market cap of bitcoin as more traders and investors are looking for free coins or higher returns.
But during the last segwit 2X hard fork (lightning bitcoin) surprisingly bitcoin continued to drop
Believe me bitcoin gathering momentum and ready for the next wave
everyone waiting and watching
lots are affected with F.O.U fear of uncertainty
but soon it would pump faster due to F.O.M.O fear of missing out…
Alright guys at this junction we end the lecture .
Thanks for following
i remain my humble self
contact lancelo schwartz live on telegram @ http://t.me/tradewithlancelo