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North America and Europe Control 88% of All Lightning Network Nodes, Research Finds

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As Bitcoin adoption grows more and more, concerns about the need for scalability solutions increase. Lightning Network is the most important layer-two development currently available on the Bitcoin blockchain, and it seems that North Americans are the favorite demographic for this efficiency-focused micropayment solution.

The Lightning Network is a layer-two solution currently under development. It focuses on the creation of channels between peers that allow for almost instant and extremely cheap transactions without the need to record it on the blokchain. The money is locked on a wallet in order for it to be available on the Lightning Network, and once a user needs to have its tokens on the Bitcoin blockchain, the channel is closed and the blockchain registers one transaction from the original wallet to the final one without registering what happened in between.

Graphic representation of how the Lightning Network works. Image: TheBlockPro
Graphic representation of how the Lightning Network works. Image: TheBlockPro

North America and Europe Rule the Lightning Network

According to a report from the University of Vienna, 45% of all Lightning Network nodes run in North America, with a large majority in the United States. Lightning Labs, the leading developer of this scaling solution, is registered in that country. Blockstream, Bitcoin’s largest development company, is registered in Canada.

Europe is the second region on the list, with 43.1% of the world’s nodes. The rest of the nodes are distributed among Asia (6.2%), Oceania (2.2%), with South America and Africa sharing a small fraction of 0.8% and 0.6%, respectively.

The contrast between the number of nodes and the adoption of Bitcoin is remarkable. Latin America has a high adoption rate of Bitcoin, according to data compiled by Chainalysis. However, it has just under 1% of Lightning Network nodes. Africa is also showing a similar picture, with a high volume of trading and adoption, but with little interest in the micro-payment system.

Channels Share Cultural Ties

Another important finding is that Lightning Network has become very popular in large urban centers. Researchers believe that this is mainly due to the better infrastructure and connectivity, which facilitates the operation of the nodes:

We could observe that LND is popular in almost all countries and also showed that within a country nodes form clusters around cities and expand into their metropolitan areas. Also infrastructure plays a significant role in the distribution of nodes within a continent or country.

They also realized that many of the nodes open channels with peers who speak the same language or have similar cultures. For example, 80% of Argentina’s payment channels are shared with Uruguay, 10% with Peru, and about 4% with Chile and Venezuela.

Most of the nodes are from large cities in Europe and North America. Image: University of Vienna
Most of the nodes are from large cities in Europe and North America. Image: University of Vienna

A similar cultural phenomenon happens in other latitudes: Kenya, for example, shares more than 70% of its channels with South Africa, while China has to share channels with Taiwan and Hong Kong, Croatia with Czechia and Bulgaria and Mexico with Colombia, Chile, Puerto Rico and Argentina.

Ethereum Grows Faster Than The Lightning Newtork

Despite being overshadowed by the DeFi hype, Lightning Network continues to grow steadily. According to data from the Lightning Network tracking site 1ML, there are currently over 14200 Lightning Network nodes in operation. The network has a capacity of over 1039 BTC.

Some of the Real-Time statistics of Bitcoin's Lightning Network. Image: 1ML
Some of the Real-Time statistics of Bitcoin’s Lightning Network. Image: 1ML

However, these statistics were recently exceeded by a somewhat heterodox solution: The number of synthetic Bitcoin tokens running on the Ethereum network already exceeded the total value of tokens moving on the Lightning Network.

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Source: https://cryptopotato.com/lightning-network-popular-north-america-europe/

Blockchain

Respected Financial Historian Calls for Bitcoin Integration into U.S. Financial System

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Financial historian and Milbank Family Senior Fellow at the Hoover Institution at Stanford University, Niall Ferguson, has penned a lengthy piece on Bitcoin which is getting noticed by the crypto community.

In it, the former Harvard and Oxford University professor commented on how the traditional naysayers and debunkers have softened their collective stances this year as the asset outperforms most other traditional investments.

Big Bitcoin Endorsements

The piece was re-tweeted a number of times, most recently by 10T Holdings co-founder Dan Tapiero who observed that this could garner huge attention. Of particular note were the comments on the integration of Bitcoin into the U.S. financial system;

“Rather than seeking to create a Chinese-style digital dollar, Joe Biden’s nascent administration should recognize the benefits of integrating Bitcoin into the U.S. financial system,”

Ferguson made additional references to China’s digital yuan adding that its potential for adoption for remittance payments or cross-border trade settlements is ‘substantial’.

The Bloomberg columnist had previously written on the virtues of Bitcoin stating that there are far fewer coins in circulation than there are millionaires on the planet.

“If millionaires collectively decided to hold just 1% of their wealth as Bitcoin, the price would be above $75,000 — higher, if adjustment is made for all the bitcoins that have been lost or hoarded.”

Big Names Paying Attention

He made reference to a number of big names in the financial world including Paul Tudor Jones, Stan Druckenmiller, Bill Miller, and even Ray Dalio that are now appearing to turn bullish. Even ardent Bitcoin detractors such as Peter Schiff and Nouriel Roubini, also mentioned in the article, have started to change their tune.

He added that adoption has much further to go, quoting Argentine-born tech investor Wences Casares who stated after ten years of working well without interruption, with close to 100 million holders, adding more than a million new holders per month and moving more than $1 billion per day worldwide;

“it has a 50% chance of hitting a price of $1 million per bitcoin in five to seven years’ time.”

The advantages of sovereignty and scarcity are obvious at a time when the supply of fiat money is exploding, Ferguson added, concluding that there was a clear demand for more privacy when it comes to a payment system that will inevitably replace cash.

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Source: https://cryptopotato.com/respected-financial-historian-calls-for-bitcoin-integration-into-u-s-financial-system/

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Blockchain

Further Declines in Bitcoin Price Possible Though Grayscale is Crucial, Notes JPM Analyst

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Although Bitcoin has recovered from its vigorous price losses during the Thanksgiving massacre, analysts from JPMorgan Chase & Co believe that further declines may still occur.

The strategists pointed out that Grayscale, through its Bitcoin Trust, will play a significant role in future BTC price developments.

Is Bitcoin To Head Further South?

The primary cryptocurrency reached a new yearly high of $19,500 last week; thus, it came less than 3% away from the 2017 all-time high of $20,000. As the community began speculating on how long it will take to surpass that level, the trend reversed viciously.

Bitcoin headed south and lost over $3,000 of value in hours. Nevertheless, the cryptocurrency has recovered most of its losses and trades north of $18,000.

A JPM analysis, led by Nikolaos Panigirtzoglou, recently said that the Thanksgiving price drops had cleared the “previous froth in momentum traders’ positioning.” However, the strategists hinted that Bitcoin could still go lower.

“Momentum traders such as commodity trading advisors and other quantitative funds likely played a big role in the slide by unwinding long Bitcoin futures positions. Momentum traders have room to further propagate” the Bitcoin decline, noted the analysts cited by Bloomberg.

Apart from broaching “momentum traders,” the strategists also discussed various other reasons behind the price developments. Those included the rumors of new regulations proposed by the Trump administration and profit-taking.

Grayscale Is Key

The JPM strategists also highlighted the significant role of Grayscale and its Grayscale Bitcoin Trust on the market. The cryptocurrency manager is the most preferred company for institutional investors to receive exposure to Bitcoin (and other digital assets) without worrying about storing the funds.

This has been exemplified through 2020 as Grayscale has reported back-to-back recording-breaking quarterly results. The assets under management (AUM) have exploded in the past 12 months to over $10 billion. Somewhat expectedly, the Grayscale Bitcoin Trust has the most substantial share.

The analysts asserted that if there’s a decline in the interest towards GBTC, this could damage the narrative that Bitcoin has become a favorite among institutional investors:

“A failure by the Grayscale Bitcoin Trust to receive additional inflows over the coming weeks would also cast doubt to the idea that institutional investors such as family offices have embarked on a trend of embracing Bitcoin as digital gold replacing traditional gold as a long-term investment.”

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Source: https://cryptopotato.com/further-declines-in-bitcoin-price-possible-though-grayscale-is-crucial-notes-jpm-analyst/

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Blockchain

Bitcoin Breaks New All-Time Highs Targeting $23,000

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The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

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Source: https://cryptobriefing.com/bitcoin-breaks-new-all-time-highs-targeting-23000/

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