A just a few weeks old Dapp is about to overtake the Lightning Network in Bitcoin deposits.
Together with another Dapp, which has not been available for long, the two now hold more than six times the amount of Bitcoin deposited on Bitcoin’s own Lightning Network (LN).
RenBTC, which only went live this month, has seen a significant jump in the amount of Bitcoin deposited as people move back and forth between the ether blockchain and the Bitcoin blockchain, but currently it is about 730 BTC.
The Bitcoin address of renBTC currently says that they have received a total of 300,000 Bitcoins, but this is most likely an incorrect representation.
Maybe a glimpse into the future, but at the moment the Lightning Network (LN) only holds 950 Bitcoins.
And this is two years after its launch – and four years after the Bitcoiners promised that the Lightning Network would solve the entire scalability problem.
You may have been right that a second layer can increase the capacity of Bitcoin – but this second layer is beginning to look more and more like ether – and not the Lightning Network.
The wBTC token managed by the Defi consortium has seen more and more jumps in the amount of Bitcoins deposited, which now reach $50 million.
Because of Ethereum’s contract-based scaling methods, most of which were introduced just a few weeks ago, tokens can have much more capacity to handle, as long as it is done within the same contract network.
This is basically the same idea as LN, but the innovation in ETH through the use of zk-tech and other methods has in some cases made this contract-based scaling a breeze when it comes to end users, because you don’t need channels, liquidity provisioning and watchtowers.
All you have to do is to deposit ETH, then the account is managed within the contract and finally settled on-chain, whereby, for example, 2,000 transactions are combined in just one ETH blockchain transaction.
However, the blockchain capacity may be the least of the attractions of ETH for Bitcoiners who are more inclined to rely on DeFi dapps.
As can be seen in the figure, trading volumes are increasing – an experiment that could eventually even disrupt Wall Street.
This is because the borrowing and lending, asset management and other financial activities for Bitcoin, ETH or other tokens and assets are carried out without the involvement of third parties, with the exception of the Codex agreement.
This means that people no longer have to give away $100 billion in profits per year to just four banks, so that in this new financial system, more profits could possibly be made than in the old market, as these billions are instead given to the users of the Dapp through higher interest rates for lending or lower ones for borrowing.
This makes the Lightning Network irrelevant. And with the speed at which things are moving, it may soon be history – while some wonder if Ethereum might not even start to make the Bitcoin blockchain itself less relevant.