Morgan Stanley envisions a worldwide Lightning Network adoption that will eventually make Bitcoin a currency to use in the everyday life.
One of the biggest US banks Morgan Stanley published a report about the phenomenal progress made by the technology that speeds up Bitcoin transactions.
It is called Lightning Network. According to the Morgan Stanley report, the network lets users make transactions instantly. It also records a staggering 410% growth every year.
Lightning Network technology is superior to Visa, the report claims.
Morgan Stanley claims we are just at the beginning of an era where consumers will choose to pay for goods and services using cryptocurrencies.
Sounds optimistic. But what’s even more important, it might actually be true.
What is Lightning Network for Bitcoin?
Firstly, let me briefly remind you about what Lightning Network is.
It is basically a ‘layer 2’ technology on Bitcoin. It allows for the transactions between to parties to be recorded outside of the blockchain in order to confirm the deal as quickly as possible (in a matter of seconds or less). And then adds the appropriate records into the blockchain.
Built on top of the Bitcoin blockchain, Lightning network brings transaction speed, network throughput, automatization, and network cost reduction.
Some experts warn about potential security issues Lightning Network might bring to Bitcoin. But no clearly dangerous threats have yet been identified.
This payment network has been growing for the last few years and passed 3500 BTC capacity in mid-March 2022.
Can Lightning Network make Bitcoin fast?
The report mainly spoke about the potential of utilizing the Lightning Network for payments using digital currencies other than fiat like USD or Euro.
Morgan Stanley experts state that the Lightning Network reached a level of development, liquidity, and critical mass that pushed it over the line into being a truly usable network.
The report suggests that the Lightning Network adoption has significantly increased. But, of course, there is still a question about its functionality on a large scale.
Experts point out that Lightning Network company Strike is already competing directly with the payment giants like Visa Direct, which offers real-time settlement of payments.
But what is even more important than speed is that there is a difference in transaction fees. Merchants will be charged lower fees by Strike when accepting payments, the report states.
Consumers will also benefit from using Lightning Network because of the privacy of their transactions.
Paying for everything with Bitcoin? How soon?
Morgan Stanley is considering various problems that might be faced for using Bitcoin payments, including customer psychology, volatility, and taxes.
One of the biggest problems here is the possible scrutiny of the whole idea of using Bitcoin as a common currency. Many experts are afraid it would directly imply that crypto is a legitimate competitor currency to the US dollar.
US authorities are still looking at the possible legislation that would allow for cryptocurrencies to exist in parallel with US Dollar. Creating Central bank digital currency, often dubbed as ‘digital dollar’, is also on the table.
Do we actually need to use Bitcoin as the currency for everyday use?
Many people tend to think that Bitcoin is not supposed to become ordinary currency as it is more of a gold competitor by its nature.
So Morgan Stanley report might surprise them. It claims that the users of Bitcoin are likely to spend their BTC during bear markets.
And again, there is an example of El Salvador where Lightning Network is a basic technology now. People pay for their coffee and bus tickets with BTC.