During the Q&A portion of a panel at the recent 2019 MIT Bitcoin Expo, an audience member asked why someone would want to use the Lightning Network for payments at a time when the bitcoin price has fallen so far from its all-time high and is expected to rise again in the future.
Rochard then explained that the price is still very much up for those who got into bitcoin much earlier than the late 2017 peak, and he added that it makes sense for those who plan to spend bitcoin in the future to work on efficient alternatives to traditional on-chain transactions today.
According to Mallers, the Lightning Network will help those who wish to move in and out of the bitcoin asset do so much more efficiently and with less friction.
“Now, what’s actually happening abstractly is you’re taking the settlement of a bearer instrument and you’re increasing the velocity of the asset into a market,” explained Mallers. “That is extremely, extremely important. Price discovery, market efficiency, efficiency of OTC desks and liquidity providers, these deep pools of liquidity crossing at spot — that is immense, immense value.”
Mallers added that normal economic activity can take place via Bitcoin’s Lightning Network after this increased market efficiency has allowed bitcoin’s value to become more stable.
“The fact [is] that if I want to execute any kind of onramp [or] offramp transaction in bitcoin settlement of the asset could take me days between six confirmations and going through custodians,” said Mallers. “Where with Lightning, it is less than a second. You’ll see that. And that’s not necessarily spending it, but that is some serious value to improving an asset class.”
During this same panel, Mallers also talked about how some types of stores, such as marijuana dispensaries, are already showing interest in Lightning Network payments.