Ruslan Tymofieiev talks about issues with the Bitcoin cryptocurrency
Ruslan Tymofieiev, the founder of the startup studio CLUST and a partner at Boosty Venture Studio, spoke about the operations of the Ukrainian startup Stroom Network, and the drawbacks of the well-known cryptocurrency Bitcoin. Read more in the new article on Vector.
Stroom Network is one of the initial investments of Boosty Venture Studio. The company's main focus is directing funds towards the development and launch of liquid Bitcoin staking on the Lightning Network.
Ruslan Tymofieiev is a well-known Ukrainian investor who founded the venture fund Adventures Lab and the startup studio CLUST. Ruslan Tymofieiev’s companies actively support emerging Ukrainian startups in their development and expansion into the international market.
The main problems of Bitcoin
Ruslan Tymofieiev notes that Bitcoin currently faces several issues, which the Lightning Network is designed to address. In particular, the concerns of Tymofieiev Ruslan revolve around the following drawbacks:
-
Speed issues. The specific structure of Bitcoin significantly reduces its throughput—each block can only accommodate a certain number of transactions. If a transaction does not fit into the current block, it enters a queue—the processing speed of payments in the queue can range from several minutes to several hours. As a result, using a token like Bitcoin for small transactions becomes impractical.
-
Cost. Transaction fees in the system are entirely dependent on the size of a specific blockchain. If the system operates quickly, the commission cost is minimal. The larger the network, the higher the commission fees. Consequently, when the Bitcoin network experiences maximum congestion, priority is given to processing transactions with the highest fees.
Ruslan Tymofieiev notes that scaling the Bitcoin network is necessary to eliminate all the mentioned issues. The Lightning Network is expected to handle this scaling.
What is Lightning Network
The Lightning Network is one of the effective solutions that will enhance the performance of the Bitcoin network while maintaining a high level of security and decentralization of the cryptocurrency. The essence lies in achieving instant execution of small payments without the need to record each transaction on the main blockchain. This is accomplished by creating special channels between users in the Bitcoin network.
If we explain the essence of the technology in simple terms, payment channels are opened between people or organizations conducting transactions with each other. As a result, a bundle of payments moves from one party to another.
Among the advantages of the Lightning Network, Ruslan Tymofieiev highlights the following points:
- High transaction speed.
- Minimal payment fees (as low as 0.003%).
- Privacy. Bypassing the main blockchain results in even greater anonymity for users' transactions.
Ruslan Tymofieiev notes that the Lightning Network is one of the innovative approaches to addressing scalability issues with Bitcoin. Currently, the network is already available in wallets such as Breeze and Wallet of Satoshi.
***
DISCLAIMER
The views, the opinions and the positions expressed in this article are those of the author alone and do not necessarily represent those of https://www.cryptowisser.com/ or any company or individual affiliated with https://www.cryptowisser.com/. We do not guarantee the accuracy, completeness or validity of any statements made within this article. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author. Any liability with regards to infringement of intellectual property rights also remains with them.