Introduction

Today I look at two sidechains which each provide utility to two much more famous legacy blockchains whose transactions per second speed and transaction fees have combined to prevent newer, smaller scale transaction based economies from flourishing there. The sidechains which I wish to briefly discuss includes the Lightening Network, a side chain for Bitcoin. And Binance Smartchain, a side chain designed so all decentralized applications on Ethereum can migrate to it, thus I will call it a side chain for Ethereum, as by design it provides no functionality for any applications on the Binance main chain.

Binance SmartChain

Binance recently announced the launch of Binance SmartChain. This new project called Binance Smart Chain, which is separate blockchain running in parallel with Binance Chain. A newer, modern blockchain with high transaction speeds, and it has several traits including it will host smart contracts and have cross blockchain swaps via a common currency BNB. This blockchain is carefully designed to be compatible with all the applications running on the Ethereum blockchain. This feature along with the set-up with smart contracts would allow decentralized applications on the Ethereum blockchain to migrate to this blockchain with no modification of their code.

Ethereum killer? We will see,

While this new blockchain with smart contracts and built-in blockchain compatibility has the potential to be a direct competitor to the Ethereum blockchain, Press Releases have so far only described it as an addition to the ecosystem, designed to work with the Ethereum blockchain. This development, is rare instance of a high profile company Binance providing a faster alternative to the legacy blockchain of a famous blockchain like Ethereum.

The Lightening Network

The Bitcoin Lightning Network is similar to Binance’s Smart Chain, but instead of being an Ethereum Sidechain, it is a Bitcoin blockchain sidechain. It’s original purpose was to relieve congestion on the Bitcoin main blockchain, but the transactions which occur on the Lightning Network Sidechain are recorded on the Bitcoin blockchain. This situation is familiar to Steem users as we had the Steem-Engine Side chain.

High Transaction Speed

This Bitcoin sidechain is built to have a very high transaction per second transaction speed. It accomplishes this goal and the creators claim it is not just the fastest blockchain in existence, they also claim it’s faster then the fastest money transfer and credit card transaction network in existence; the one backing up Visa Credit Card Services. If true this would be a revolutionary development.

Microtransaction

The other remarkable thing about the Lightening Network is that it’s an off chain operation, meaning off the Bitcoin main chain. This enables micro transactions and micro transaction fees. These smaller transactions and smaller fees are not economically feasible on the Bitcoin Main Chain.

Microeconomies

The native ability of Bitcoin to be divided into very small pieces called Satoshis or Sats for short, combined with both micro transactions and micro transaction fees is a unique combination of characteristics. These characteristics on this financial transaction network allows the development of smaller economies to function on this sidechain, but conduct business in Bitcoin.

Revolutionary Micro-economies

This truly revolutionary capability of micro transactions and fees, in a well known alternative to Country Specific Fiat currencies like US Dollars or Venezuelan Pesos. These small economies can use Bitcoin, which is not only a deflationary, but is a widely trusted store of value for countries suffering from severe inflation and devaluation of their currencies all over the world.

The economic feasibility of micro fees versus no fees

This should also raise the question of large fees versus micro fees versus no fees. A blockchain like Steem with fast free transaction might also fit into this picture.

Mass Adoption and preserving the value of wages

The opportunities for banking services and retail transactions using Bitcoin Micro-transactions is to me, a huge, as yet, untapped, opportunity to speed cryptocurrency along the path of mass adoption. But the bigger picture is how much human suffering could potentially be avoided by enabling millions of people across the globe to maintain their buying power of their wages by utilizing the model deflationary cryptocurrency Bitcoin.

Last Thoughts

Cryptocurrency Tribalism, Isolated Success Stories and Collaboration

As I look across the landscape of North and South America I see several economies engulfed in the financial conflagration of hyperinflation. I speak figuratively, but my meaning is that several countries national economies are on fire and burning out of control with hyperinflation and currency devaluation. The rate of currency devaluation is so fast that wages not converted to Bitcoin, Dash, Petro’s or other deflationary cryptocurrencies are quickly see their value plummet, as if it was being consumed by flames.

Individual successes

The unique successes of Dash to make in roads into adoption, the large scale Venezuelan government efforts to produce nationwide adoption of the Petro, technological advancements like SMS Text cryptocurrency wallets, which allow cryptocurrency transactions without internet connections are all ideas which could be combined with a MakerDao or Just like application on the Lightening Network to produces amazing financial stability.

Maybe I am just a dreamer, but I am not the only one. If we could combine the knowledge and experiences of Blockstream, Dash, the Lightening Network and one of the two companies currently providing SMS Text wallets, we could do amazing things. Then mass adoption would take care of it self.

Written by Shortsegments. ✍🏼

Project Hope is 20% beneficiary of this post.

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