As Bitcoin moved within $100 of $8,000, many cited the “Consensus effect.” Each year, for the past few, at least, the price of the pioneer cryptocurrency has often jumped a few hundred dollars during the week of the three-day event. As the space appears to be stepping out of a prolonged bear market, investors, commentators, developers, and many others gathered for the first day of the Consensus 2019.
Lightning Network Update
Dr. Bitcoin, otherwise known as Christian Decker, opened the day’s events with a birds-eye view of how the Lightning Network is growing. Since last year, the Blockstream researcher explained that Bitcoin has experienced a four-fold increase in its Lightning Node count since last year. Not only that, but the number of channels between nodes is also expanding and creating a much tighter network.
The advantage of a tighter network helps correct one of the larger vulnerabilities of the second layer scaling solution: Routing errors. When a user in the network wants to send a micropayment to another user somewhere else on the network, sometimes that payment has difficulty arriving as there aren’t enough channels to connect the two users efficiently. Down the line, according to Decker, other improvements will arrive including splicing and multipath routing to name a few.
“There’s really so much to do,” Decker told the audience. “If you find anything interesting to contribute too, please do.”
To make the onboarding and excitement equivalent to the arrival of Bitcoin, Pierre Rochard and Will O’Beirne then went on to speak on the merits of their respective solutions, Node Launcher and Lightning Joule. The first is a desktop Lightning node that offers incoming users an easy-to-use, UI-focused experience on both Mac and Windows. More to the point, it is also compatible with O’Beirne’s project, Joule.
Like a MetaMask for Bitcoin, O’Beirne explained how users could use Joule to create Lightning invoices, play games of chess, and a host of other use cases. Unfortunately, there are still a ton of barriers preventing mainstream adoption of the speedy payment platform. Even Jameson Lopp, a Bitcoin Core developer and now head of Casa Node, users should still avoid putting more money in a channel than they’re willing to lose.
Crypto Goes Where Regulations Don’t
A crypto conference isn’t worth its salt without a few panels on how regulators are approaching the space. As such, Robert Kim, a Bloomberg legal analyst, moderated a panel with Haily Lennon of Biflyer, John E. Smith, formerly the head of the Office of Foreign Asset Controls (OFAC), and Amy Kim, the chief policy officer of the Digital Chamber of Commerce.
Albeit a brief 20 minutes of discussion, what became clear is the prickly situation of American regulations often tucked into an inherently global technology. Smith underlined this fact when explaining that regardless of the operation if there is an “American nexus,” such as an American server, citizen, corporation, that is involved, the operation is subject to American law.
Naturally, this has deterred several Initial Coin Offerings (ICOs) from ever opening their doors to American retail investors. In the off-chance that one does slip in, however, the platform is in for a bit of trouble.
On recounting the general rule of thumb during his time at OFAC, Smith said that he and his colleagues followed the mantra that “better compliance comes through strong enforcement.” The intensity in which such agencies will pursue their version of justice also puts a lot of pressure of crypto businesses. Haily Lennon of the Japan-based exchange Bitflyer explained how her team lists digital assets only they have undergone a hefty screening.
The same holds for incoming users and brings into question the emerging need to reevaluate such constricting regulations.
Is Winter Over?
Throughout the opening day’s events were references to the recent spike in Bitcoin prices. Since the last two weeks, the number one cryptocurrency by market value has moved from a wobbly $6,000 to flirting with $8,000. The parabolic breakout has even convinced naysayers that indeed the bear market may have run its course.
Strangely, this appears to happen every year around the time of Blockchain Week and Consensus. The only question at this point is if these prices will hold once everyone has left New York.