Chinese Players Absent in Lightning Network – Here’s Why
Mar 9, China-based digital wallet operator Hoo.com has launched a lightning network (LN) wallet. It is also the first Bitcoin lightning network wallet application in China. This initiative triggers the thinking of why the LN applications are so rare in China.
According to the 1ML, China only contributed 30 nodes and 3.027 BTC in the capacity of the lightning network, which accounts for 0.77 percent and 0.196 percent respectively in global LN usage. Some insiders commented that less Chinese participate in LN due to lack of clear economic benefit.
As we all know, the lightning network is a second-layer scaling solution on top of Bitcoin blockchain. The solution was originally designed to boost the trading efficiency of Bitcoin.
Actually, there are many Chinese crypto enthusiasts always keep an eye on the LN, however, instead of the actual application or the framework construction of LN, they are more concerned about its impact on Bitcoin price.
The Lightning Network is first proposed by Joseph Poon and Thaddeus Dryja in a white paper titled “The Bitcoin Lightning Network: Scalable Off-chain Instant Payments” in 2016, however, the academic discussion and R&D of Lightning Network are still limited in crypto geek zone at the current stage.
Recently, a pseudonymous Twitter user hodlonaut started the #LNTrustChain Lightning Torch initiative. This movement put the LN under the spotlight. Many big names, including Twitter CEO Jack Dorsey and LinkedIn founder Reid Hoffman has participated in this torch relay. It is a good promotion for the general public to get to know the LN, but it has also brought to light some of LN’s limitation.
Jiang Zhuoer, the founder of Bitcoin mining pool BTC.TOP indicated that the LN is a kind of payment network with a limited user base. Unless there is an extremely centralized super lightning hub, it cannot be the cure for Bitcoin’s scalability crisis. In addition, EOS founder BM has also questioned the security of the lightning network.
At present, the lightning network infrastructure is still far away from large-scale commercial use. Most of the existing applications just use the name of LN but cannot provide a decentralized, trustless service.
Meanwhile, the main application of LN is micro-payment, which is highly relating to regulatory issues. Unfortunately, the regulatory environment surrounding cryptocurrency industry in China has been very harsh, which inhibit people’s passion for LN adoption.