During this bear market, growth persists. Prices may not be reaching to the moon but, in a way, technical achievements are. As mentioned in other pieces, this relates back to prioritizing building over trading and holding assets in the crypto space.
Essentially, only the continued work and growth of the blockchain development community will push us forward. Today, Michael Casey penned a piece for CoinDesk on this topic, in which he had one major conclusion to bring to light.
To kick things off, most of us will likely agree with Casey that we need a change of perspective in the entire blockchain industry. We cannot continue to grow with the overarching worldview that everything is either drastically positive or drastically negative. Just one look at a unique scale like the Fear & Greed Index from Alternative.me shows how much these emotions can affect a space. At least in a general sense, when any financial market is new, its’ price movements are historically more affected by investors’ emotional responses to extreme events.
In this sense, one could conclude that the crypto market is analogous to an early version of the stock market. Both are affected by these things and yet the stock market has been around for much longer and is therefore, more resilient to events that are not actually catastrophic.
With this in mind, we can logically return to the biggest issue that Casey thinks is truly holding the industry back. According to him, this may be understood as achieving the ideal balance between decentralization and high performance in a blockchain network? As he suggests, Ethereum and Bitcoin are the top two examples of networks that urgently need to solve this, especially since they are its’ top assets historically.
In other words, if they cannot scale more soon, then how will the less powerful assets follow suit? In answer to this, Casey reminds us of the work that continues to be done on “Layer Two” solutions, with the Lightning Network rising to the front of the pack. To recap, the significance of the Lightning Network is that it appears to solve the problem of scaling Bitcoin for widespread usage. Without it, the network is primarily built for large, instead of everyday transactions.
Since its’ 2015 inception, the network has grown to 4,400 full users and 13,500 individual payment channels, which Casey points out have increased this month by 10.45% and 43.5%. Therefore, with these numbers in mind, technical growth is persisting through the current bear market.
Lending major credence to this idea is the work being done on the Ethereum network. While Bitcoin is mainly focusing on scaling on the second layer, Ethereum is doing so on both layers, with the Raiden network standing as its’ equivalent to the Lightning Network, while sharding exists as its’ major undertaking on the first layer.
If you are not familiar with sharding, just think about the fact that both Bitcoin and Ethereum are not anywhere close to the transaction processing ability of our major legacy payment networks like Visa. Generally, Sharding proposes that by separating nodes into workgroups instead of one whole group, a blockchain will become much more efficient.
When all of this is fully implemented, we will see if it works as it should with both of crypto’s leading networks. In the end, as mentioned above, what is most important for now is for us to remember that the blockchain industry is moving forward, with and without price-related gains.
By: BGN Editorial Staff