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This article explores five compelling use cases for Bitcoins Lightning Network, a layer 2 (L2) payment protocol designed to address Bitcoins scalability issues and enable instant, low-cost transactions.

The Lightning Network is a payment protocol that operates on top of a blockchain, such as Bitcoin or Litecoin, to enable fast and low-cost transactions. As explained by Binance Academy, the Lightning Network is an off-chain or layer two solution, which means that it allows individuals to transact without recording every transaction on the blockchain. This is made possible by creating a separate network that communicates with the main blockchain using its own nodes and software.

To enter or exit the Lightning Network, users need to create special transactions on the blockchain, which allow them to create a mini-ledger, also known as a channel, with another user. This channel operates like a smart contract, holding a private ledger between the parties. Each transaction on this ledger updates the balance between the parties in the channel.

For instance, if Alice and Bob put 5 BTC each into the smart contract, both parties would have a balance of 5 BTC in their channel. Alice could then write to the ledger, pay 1 BTC to Bob, which would update the balance to 4 BTC for Alice and 6 BTC for Bob. Bob could then send 2 BTC back to Alice later, updating the balances to 6 BTC for Alice and 4 BTC for Bob. This process can continue for many transactions without the need to record each one on the main blockchain.

Lightning transactions are speedy and cheap since they dont require block confirmations, which can cause delays and increase fees. Payments can be made as fast as the internet connection permits.

Below are some of the top use cases for Bitcoins Lightning network:

David Marcus, the Co-Founder and CEO of Bitcoin startup Lightspark, was interviewed by Alex Heath on The Verges Decoder with Nilay Patel podcast. The conversation covered a range of topics, such as the current state of the crypto industry, the unique opportunities offered by Bitcoin and the Lightning Network, and how Lightspark intends to simplify access to the network for developers and businesses.

Marcus emphasized the importance of an open, interoperable protocol for money on the internet and stated that Bitcoin is the only network that satisfies this requirement due to its robust, battle-tested infrastructure and lack of central control. Lightspark is built on the Lightning Network and aims to simplify the process of using the Lightning Network by providing an enterprise-grade entry point, charging a small fee for transactions conducted through its platform. Marcus is particularly excited about the concept of streaming money, which involves sending small amounts of money, even fractions of a cent, in real-time across the network, potentially revolutionizing how people transact online.

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Unleashing the Power of Bitcoin: The Lightning Network's 5 Best ... - CryptoGlobe

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In one of the more bizarre intraday price moves we've seen in the crypto market in a while, it was the stairs up and the elevator down for Bitcoin (BTC-USD) on Wednesday. Bulls and bears both took it on the chin at various points during the session. First, bulls pushed the price up to $30,000 from a Tuesday close of $28,300.

BTC 1hr Chart (TradingView)

Then late in the Wednesday session BTC's dollar price crashed more than 8% in about a 90 minute timeframe from $29,700 down to $27,200 before somewhat amusingly closing the Wednesday session back at $28,400. In the process, more than $2.5 billion in open interest was wiped out during that single elevator candle.

There was quite a bit of speculation that the dump was caused by a rumor-related panic sell following a $26.6 million BTC deposit to Binance by market maker Jump Trading. This deposit was alerted via Twitter by chain analysis company Arkham Intelligence and was in close proximity to a false alert that the US Federal Government was actively selling seized BTC holdings from the Silk Road confiscations. That alert was attributed to Arkham.

US Gov BTC Holdings (Dune Analytics/21Shares)

That turned out to not be true as the US Government's balance is still well over 205k BTC and hasn't budged since early March. Arkham's explanation online was that the alert did indeed happen but that it was improperly configured at the user end by a well-followed crypto news account on Twitter. The account then shared that incorrect information online.

Onlookers falsely attributed the decline in BTC's price to Jump Trading reacting to the Arkham Silk Road funds alert, when it in actuality Jump's deposit was an hour earlier. The end result was a very volatile Wednesday session that closed roughly breakeven, but not before traders lost billions in the process.

As far as the actual activity on the network is concerned, Bitcoin's usage has remained stable in recent weeks and we're seeing that activity reflected through a generally positive trend in daily active users:

Active Addresses (Messari)

DAUs on the main layer have oscillated between 800k and 1 million over the last several weeks. Raw transaction figures have increased in recent days according to data from IntoTheBlock. However, despite the increase in total transactions, the BTC volume of the transactions has remained low compared to 2022 levels.

BTC Transaction Volume (IntoTheBlock)

After cooling off for much of April, there has been a noticeable jump in daily fees over the last couple of days:

BTC Daily Fees (Token Terminal)

In my opinion, this is likely attributable to another increase in Ordinals mints. Adoption of Bitcoin's controversial NFT project Ordinals continues to make new daily inscription highs. There have now been over 2 million NFTs minted with Bitcoin's block space since that project launched a few months ago.

Ordinals Daily Mints (Dune Analytics/dgtl_assets)

However, what's been different about this recent surge higher in Ordinals mints has been the lack of a surge in transaction fees up until the last couple of days.

Ordinals Fees (Dune Analytics/dgtl_assets)

We can see from the chart above that daily fees paid to inscribe Ordinals fell from a peak of $375k on March 24th down to just $8.8k on April 20th. This recent pop in daily inscriptions has resulted in more fee revenue than was apparent during the early April inscription highs.

Another important metric to consider when guessing where the BTC price is going in the short to medium term is exchange flows. Typically when exchange flow is net negative, it means buyers are accumulating and taking assets into self-custody. Conversely, when exchange net flow is positive, it could be a sign that holders are looking to take profit.

Exchange Net Flows 1 Month (IntoTheBlock)

According to data provided by IntoTheBlock, aggregated exchange flows have been positive by nearly 76k BTC since the start of April. That represents $2.2 billion in positive net flow over the last 27 days. I'd call that a fairly bearish development for the short term.

90 Day NVT (CoinMetrics)

Something else that I often point to when I look at these more payment-focused cryptocurrencies is the NVT ratio. The NVT utilizes the USD value of the transaction volume and the market capitalization of each cryptocurrency to try to determine when a coin is moving more based on speculation rather than when it is moving because of an increase in value being transacted. The higher the NVT, the more overvalued the coin theoretically is.

The day to day variance of this metric can be very volatile so to smooth it out I like looking at the 90 day adjustment. Bitcoin's 90 day NVT ratio is still above 150. It's gone from the cheapest PoW coin by NVT last summer to the most expensive one now. There is no standard rule for what a low NVT is or what a high NVT is. Personally, I think 150 is high. I take that view because before February of this year, the last time BTC was above 150 on a 90 day adjusted NVT was in November 2013.

There are many lessons that crypto participants can take from the Jump/Arkham confusion. From where I sit, the most important one is to watch the chains, not the Twitter feed. I would also be very cautious when using leverage in these assets. Market participants who buy and hold with confidence didn't get wiped out on Wednesday. It was the day traders and margin bettors who did.

Block Reward vs Price (LookIntoBitcoin)

There is a Bitcoin halving a year away. If history rhymes, BTC's dollar denominated price will be much higher in 18 to 24 months than it is now. Dollar cost average holders who don't play the margin game will likely do very well post-halving. At this point, the last thing a Bitcoin bull should want is to get wiped out through leverage before the next cycle starts. Risks certainly remain and there is no guarantee that BTC will continue to behave the same way it has behaved following previous halving events.

When assessing everything that I'm seeing on chain, I would probably be cautious rather than aggressive at this point. It is very possible we see a higher BTC price in the weeks and months ahead. There are positive signs from a usage and a holder growth standpoint. However, I believe in the shorter term, bulls who want to aggressively scale a position rather than dollar cost average over time can probably be patient and wait for a better price.

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Bitcoin: A Flash Crash And A Look At The Fundamentals (BTC-USD) - Seeking Alpha

Compared to a dismal 2022, Bitcoin (BTC -0.33%) is on a tear in 2023. Since the beginning of the new year, the world's most valuable cryptocurrency is up more than 70% year to date. While this jump in prices is refreshing, especially when considering it has accomplished this in less than four months, Bitcoin still remains almost 60% off its all-time high.

This dichotomy between a recent rally but still well off from its previous highs makes evaluating Bitcoin's current position a little difficult. However, there are two charts that might add some perspective and shed some light on whether the cryptocurrency is a buy or a sell today.

One of the primary investment theses for Bitcoin is that it is one of the most decentralized and highly secure networks in the world. While this is true, how can we be sure? Thankfully there is a metric that quantifies this decentralization and security.

Known as hash rate, this statistic measures the amount of computational power required to mine one block on the Bitcoin blockchain. As hash rate increases, it becomes more difficult to mine Bitcoin blocks, and thus increases the security and decentralization of the network. There are quite a few dynamics at play when it comes to hash rate, but what investors should know is that today Bitcoin's hash rate sits just below its all-time high.

Image source: TradingView.

While Bitcoin's price has gone through multiple bear markets and crypto winters, there has been a clear trend of its hash rate increasing with time, regardless of market conditions. It is difficult to emphasize just how important this is.

As long as its hash rate continues on this upward trend, the premise of investing in Bitcoin remains intact.

Although Bitcoin's hash rate sits at record levels, its price remains well off from the November 2021 all-time high of nearly $69,000. The cycle of Bitcoin hitting seemingly impossible new highs every few years is a recurring theme, but so is its subsequent dramatic fall from those levels.

Based on the chart below, we can get our bearings on Bitcoin's current standing in these boom-and-bust cycles that have become so common.

Image source: TradingView.

Today, as mentioned, Bitcoin is far from its all-time high. But rather than just showing price, this chart shows the percent decline from Bitcoin's previous all-time high. While we aren't trying to time the market, imagine that you bought Bitcoin every time it fell into these deep troughs. It's in these deep valleys where the most lucrative returns are found.

While hindsight is always 20/20, today Bitcoin is once again at a low point in this chart. Although it might sound like timing the market, the true goal here is to find occasions when Bitcoin's valuation does not match its worth and long-term potential, thereby creating a rare buying opportunity.

The combination of Bitcoin's low price and its hash rate now near an all-time high is likely the only argument needed to warrant an investment in the cryptocurrency today. While we can never have certainty, should the next bull market arrive, those who invest today may be poised to reap the greatest rewards.

RJ Fulton has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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Bitcoin In 2 Charts: Is It Time to Sell? - The Motley Fool

Mawson Infrastructure Group announced on Monday that the company has secured a new mining site in Corning, Ohio. The bitcoin mining firm, on May 1, 2023, unveiled its plans to set up its miners at the new location by Q3 of this year, with an aim to raise the operations hashpower by 1 exahash per second (EH/s).

On May 1, 2023, Mawson Infrastructure Group revealed it has signed an agreement for a new site in Ohio. This development comes on the heels of the companys prior ventures in Pennsylvania and the decision to pull out of Australia.

The new mining site, located in Ohio, is expected to offer a starting capacity of 24 MW. Mawson, however, anticipates expanding its operations to harness an additional 26 MW of power, effectively bringing the total capacity of the site to 50 MW.

The mining company disclosed it already operates 240 MW of capacity in the surrounding area. We are very excited to have finalized this new site acquisition. The addition of this site to our portfolio of assets in the region is a great achievement by the team reinforcing our revised strategy of focus in the PA/OH region, Mawsons CEO, James Manning commented.

Despite the expansion news, Mawsons publicly-listed shares (Nasdaq: MIGI) have experienced a 5% drop in the last 24 hours and a 1.97% decline over the last month. Nonetheless, the statistics of the past six months reveal an upward trend in MIGI shares by 11.26%, and year-to-date, the shares have increased more than 107%.

Mawsons initial plan for the Corning facility is to house 12 mobile data center (MDC) units and 7,056 miners. Both hosted and self-hosted machines will be deployed at the new mining location. Just prior to the Ohio announcement, in April, Mawson sold its Greenfield Texas sites for $8.5 million.

What do you think the future holds for Mawson Infrastructure Groups expansion plans in the PA/OH region? Share your thoughts about this subject in the comments section below.

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 7,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Mawson Infrastructure Group Expands to New Bitcoin Mining Site in ... - Bitcoin News

Investors aren't sure what to make of bitcoin right now. Since the beginning of the year, the cryptocurrency has behaved as both a risk asset and a hedge against uncertainty. That's been especially true since turmoil in the U.S. banking sector began in March and returned volatility to the market. Bitcoin has soared 77% this year. Volatility (and therefore uncertainty) is a key characteristic of cryptocurrencies at least for now. Despite what looks and sounds like institutional adoption and mainstream advancement, it's still very early days for the industry, so getting comfortable with the unpredictability is step one to being a good investor in it, according to Tyrone Ross, president and founder of financial planning firm 401 Financial. "If you make an investment into bitcoin, you understand that this is par for the course, it just is," he told CNBC. "You can dollar cost average in and hold it. Traders who have used a lot of leverage and have gotten liquidated in shorts those folks have a whole different set of issues than those that are really looking at it as an investment. These moves should not bother you if you are really an investor in bitcoin and understand it." "Believe in the core reasons for which you put money in and hopefully there are some 'narratives' around that that you can hang on to when it gets really volatile like this," he added. Bitcoin spent much of 2022 being tied to stocks, with inflation data and Fed policy as its main price drivers. That correlation has been sliding since the beginning of this year, but bitcoin remains sensitive to the macro economy. Meanwhile, its correlation with gold spiked in early March when the banking crisis began. This week, just as crypto volatility had returned to pre-banking crisis lows , troubles at First Republic Bank reignited concerns about the health of U.S. banks and bitcoin rallied as much as 8% . Still, investors are holding their breath for the next policy decision by the Fed at its meeting next week with many expecting a hard landing, and positioning for dollar debasement and interest rate cuts. Additionally, with so much liquidity having been drained from the market these past two months, investors aren't trusting any bitcoin rally to turn into the next great bull run. "Because bitcoin takes on a lot of asset profiles risk asset, store of value, VC-like nascent asset class investing in it is actually really attractive," said Greg King, CEOof investment company Osprey Funds. "Truly uncorrelated assets, with unpredictable behavior and a positive expected value, are rare jewels in terms of portfolio allocation." "Being highly volatile means that even a small allocation of bitcoin to a portfolio is enough to make the investment noticeable," he added. A very early technology play Looking at the price path on short timeframes, bitcoin will and often does mimic high-risk assets. The volatility will go away though, as it has for other new technology advancements before it, according to Mark Connors, head of research at Canadian investment fund manager 3iQ. He pointed out that over the past 10 years, bitcoin has declined from 5x more volatile than the Nasdaq in 2015 to 3x in 2019, to just 1.8x at the end of last year. "The qualities that make it an exponential grower bear out over periods of quarters and years," he said. "It's declining its volatility profile at a greater rate relative to equities," he said. "Mature assets don't have high adoption rates," he added. "People already own all the equities they're going to own. We're not going to have another 20% of people buy equities because there aren't 20% of people around to buy equities birth rates are down, portfolios are mature." Ross had a nuanced view, arguing that bitcoin remains a highly volatile asset. BTC.CM= 1Y mountain Bitcoin over the past year For the past decade traders have tried to understand bitcoin's identity, sometimes with little patience for its newness and ability to morph from one thing to another. It was designed to be digital cash for those excluded from the formal financial system. New entrants to the market that came in the 2021 bull run were sold on the idea of a hedge against inflation. They've gotten used to it trading like a stock. "Is it pristine collateral for some folks? Perhaps," Ross said. "Is it a better currency for some folks? Yes. Is it an inflation hedge? It didn't seem like it was. Is it safety when First Republic Bank looks like it's on the brink of collapse? Sure. But it's a speculative asset that is highly volatile and benefits from a very liquid environment," he said. For Ross, it's also a technology bet. New crypto investors often overlook the Bitcoin technology, focusing instead on bitcoin the crypto asset. Ross is bullish on its ability to act as a financial system for those who can't access bank accounts. "We have a venture capital investment essentially, with liquid pricing," Connors said. "That's a combination we're not used to, so to have an understanding of it is job one. The second one is to size it appropriately so that you're not watching all the time." "Volatility is a price you pay and, as people say, price is the least interesting thing about bitcoin although that's a hard pill to swallow," Connors added.

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Bitcoin keeps wavering between a store of value and a high-risk ... - CNBC