Will Bitcoin’s Lightening Turn Corporate?
Despite the fact that it is still in its beta stage, developers from all across the world are devoting time and resources to the Lightening Network to help build the foundation for a more scalable version of Bitcoin, the world’s first, most valuable and oldest cryptocurrency.
The belief in the Lightening Network is so strong that there are already more than 1000 lightening nodes running this software. Even though most of them are running this software at a loss, they developers believe that in the long run, it will lead to a more affordable and accessible Bitcoin network.
However, now that the software is going to be entering the bootstrapping phase of development, people fear that this system too well turn corporate. When Bitcoin mining became profitable, the entire process shifted from a home-computing-PC-mining operation to big-business-industrial-operations.
According to BitGo engineer Jameson Lopp, all networks, no matter how small in the beginning, end up with specialists who provide those specific services more cost effectively. Basically, if a venture is good, it will eventually turn corporate.
A Twitter user summed up the problem. The Lightening Network will end up centralizing the Bitcoin network with channels and hubs. And these hubs will end up functioning like banks. Another user tweeted that Lightening nodes are like full-reserve banks and the network ends up becoming a banking scheme.
Besides the freelance volunteers, there are also fully fledged companies that are supporting the Lightening Network. These companies, such as Blockstream, Lightening Labs and ACINQ, are currently working on the network pro bono, however, at some point in time, they would need to start generating profits.
Such kind of work is actually a huge business opportunity for these companies, and that is what cryptocurrency purists are worried about. Prime examples of how companies scaled up and started charging for their services are Facebook and Twitter.
The silver lining to this is that there are a number of factors that will prevent the scaling up to an enterprise level – for the time being.
Factors Preventing the Network Going Corporate – For Now
The biggest difference between Bitcoin and Lightening Network is cheap access. Right now, the Lightening Network is designed to be cheap, not needed any specialized hardware like Bitcoin does. This factor itself will prevent corporate centralization.
Another reason is that the Lightening nodes are not unique – there are already over a thousand in operation. And, if users don’t like the way a node is behaving, they can easily abandon that node for another. Centralization is not a concern at this stage.
At the end of the day, the Lightening Network is still taking baby steps and the idea of it going corporate is still a long way away.