Bitcoin Is Scaling Exponentially With Lightning Network

Hans Hauge profile picture
Hans Hauge


  • The lightning network is a critical network upgrade that will allow Bitcoin to scale by orders of magnitude.
  • The lightning network is not a single protocol, but rather a collection of proposals and open source software that are designed to be synergistic.
  • Lightning network technology is already spreading to other cryptocurrencies, such as Ethereum under the name Plasma.
  • This idea was first discussed with members of my private investing community, Crypto Blue Chips. To get an exclusive 'first look' at my best ideas, start your free trial today >>


Many have claimed that Bitcoin (BTC-USD)(COIN)(OTC:GBTC) and or blockchain cannot scale. There is some truth to this, but as we will see; scale is a moving target. There are many aspects to scaling and many approaches to "solve" the scaling problem. The Lightning Network is one such approach, which is also multifaceted. If the Lightning Network can deliver on the capabilities that its originators claim, then the argument that Bitcoin/blockchain cannot scale will have been dispelled (the theoretical speed is billions of transactions per day); at least for a while.

Why are blockchains slow?

In software development, we start off by thinking about what problem we are trying to solve before we ever write a line of code. Each piece of software (ideally) should be written to solve a certain problem the most effective way possible. I'll give you one example.

Let's suppose your problem is that you need to store and retrieve data. Usually, this problem is solved using a database. However, databases have certain limitations. One of those limitations is that even the largest databases do have storage limits. Also, if your data (or the query you need to run on that data) is complex, the time it takes to get your data out of that database could be longer than your customers want to wait.

Imagine you're Google (GOOGL). Someone searches for the term "bicycle." It turns out there are at least 744,000,000 results for this search term, and your users are expecting a response in a fraction of a second. I'll spare you the technical details, but there are certain strategies that Google will use to make this happen. Some of their strategies might be to denormalize the data, make use of caching, and serve the data to you from the closest possible CDN.


This article was written by

Hans Hauge profile picture
I started my career as a factory manager and then switched over to software. Along the way I got a BS in IT, an MBA, and discovered Bitcoin. I started a couple small companies and wrote a few articles about cryptocurrency. Eventually I became the opinion leader on Seeking Alpha for the Bitcoin/Crypto. Currently heading up quantitative strategy at Ikigai.

Disclosure: I am/we are long BTC-USD, ETH-USD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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