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- Daily unique transactions on the Bitcoin network have seen a significant drop.
- Although this fall, cutting can provide an impetus for development.
- The Lightning Network promises to solve bitcoin scaling problems.
Scalability issues remain the bane of most major blockchain networks and, more recently, Bitcoin. The largest cryptocurrency has seen network usage decline as it continues Struggling with network congestion.
On Thursday, May 18, the number of unique addresses making daily transactions fell below 800,000. This marks a 22-month low for Bitcoin The lowest level since July 2022.
However, this decline may not necessarily indicate a decline in Bitcoin interest. like Sizing solutions With an increase in popularity, the Bitcoin network could naturally see a decrease in activity.
Lightning can alleviate Bitcoin congestion problems
The decrease in daily unique transactions does not account for cross transactions Lightning Network, bitcoin layer 2. For some, this scaling solution holds the keys to making bitcoin transactions faster and cheaper.
With the increasing popularity of scaling solutions, Bitcoin congestion issues can be resolved. However, this is likely to lead to a natural decline in base layer transaction activity as more users migrate to layer 2 solutions.
However, the recent decline in transactions on the Bitcoin network did not come with a reward activity on the Lightning Network. This indicates that despite its advantages, the Lightning Network still faces hurdles before it reaches mass adoption.
For example, technical challenges such as routing issues and channel capacity limitations have been a sticking point for some users. Moreover, building a Lightning node can be daunting for non-technical users, which is another barrier to widespread adoption.
Bitcoin struggles with ordinal values
This sudden drop in unique transactions is likely due to a rise in ordinal. These inscriptions, Bitcoin’s answer to non-fungible tokens (NFTs), is becoming increasingly popular. However, its popularity comes at a price, helping to escalate gas charges on the grid.
As gas prices continue to rise, more and more users start avoiding unnecessary transactions. This is likely the reason behind the noticeable drop in overall network activity.
on the flip side
- in May, Litecoin Achieved a record number of transactions thanks to high fees and congestion on the Bitcoin network.
- The bitcoin community disagrees with how ordinal should be handled. In May, one of the core developers suggested blocking arrangements A civil war began In the community.
Why is this important
Bitcoin scaling issues could greatly affect the dominant cryptocurrency in the future. As the community deals with scaling issues, it is critical to understand how they affect the network.
Read more about how Lightning handles the ordinal problem:
How the Lightning Network’s Taproot upgrade solves BRC-20 issues
Read about the latest trends in retail utilization DeFi:
Uniswap survey reveals barriers to DeFi, but users are eager to experiment
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