What Bitcoin’s Lightning Network Means For Tether

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For those unfamiliar, Tether (USDT) is a U.S. Dollar stablecoin. It exists outside the current financial system and is transferred over cryptocurrency networks. Tether is centralized because a firm that maintains a reserve of USD and other assets (including bitcoin) manages it. They back each Tether 1:1 with a USD counterpart. For years, the U.S. government has been after Tether. This is because they have successfully run outside of the regular system while supplying people worldwide. All of this is to imply that people would only hold Tether if it were necessary to conduct a transaction. Having said that, there is little question that Tether is in high demand throughout the world. More so, as people try to avoid the short-term bitcoin’s price volatility. Many users in developing countries don’t have the luxury of sitting back and stomaching bitcoin’s rollercoaster price changes. So, they store some of their holdings in stablecoins. By doing this, they do not have to worry about not being able to purchase what they want when they want to spend. Leveraging on the Omni Layer Protocol What’s remarkable about Synonym’s Tether implementation on Lightning Network is that it uses the Omni Layer protocol. Tether’s first introduction was to this protocol. As on-chain fees rose in the subsequent years, there was a shift from Tether usage to other chains. The reason for this was to take advantage of their lower fees. Since then, it’s been a game of hot potato – jumping from one chain to the next. Is Synonym’s implementation of Tether on Lightning Network something that will drive Tether usage back to the bitcoin stack? Especially given that the Lightning Network already offers magnanimous low fees on top of the world’s most secure ledger? We’ll see what happens. It would be interesting to see Tether (or other stablecoins) migrate to bitcoin. This is logical, seeing that the USD is falling miserably, and stablecoins are nothing more than a transitional mechanism that provides a bit of volatility cover as we transition from a fiat standard to a bitcoin standard. What is the Omni Layer Protocol? Omni is a platform that allows users to develop and trade their cryptocurrencies and digital assets. The Omni Layer is a software layer built on top of Bitcoin, the most well-known and secure Blockchain. The Omni Layer, formerly known as Mastercoin, came into existence in 2013 by its chief architect, JR Willett. After that, there was a statement by a white paper release that its technology was available. Their reference implementation, Omni Core, is an update to the Bitcoin Core. It incorporates all of Bitcoin’s capabilities and extra Omni Layer features. Using the Omni Layer, it can easily build tokens to represent bespoke coins or assets and trade them on the Bitcoin network. Omni’s robustness and simplicity have been a great help in pushing it to become the leading Bitcoin-based token protocol. However, this functionality isn’t as popular as Ethereum’s ERC-20 or Tron’s Trc-20. What is OmniBOLT? OmniBOLT is a derivative of the OmniLayer network, allowing building assets on top of bitcoin. It was the first network to mint Tether (USDT). The framework of OmniBOLT is on the Lightning Network specification’s core theory. It defines how Lightning channels enable the dissemination of OmniLayer assets. It also describes how smart assets profit from this unique swift payment theory. Furthermore, OmniBOLT offers more flexible contracts for decentralized upper layer apps. The OmniBOLT daemon is a golang implementation of this specification. It is an open-source, off-chain decentralized platform atop the BTC/OmniLayer network that implements atomic multi-currency swaps, basic HTLC payment, and more off-chain contracts on the Lightning Network channels. The DeFi sector demands a far more flexible, extendable, and less expensive smart assets circulation solution to tackle the main chain scalability challenge. Hence, the lightning network is a reliable solution to this problem. Conclusion We need a protocol to handle a larger range of assets for upper-layer applications such as gaming, payment, finance, or situations that need stable currencies, according to the BOLT (Basis of Lightning Technology), a layer-2 protocol standard for off-chain bitcoin transfer. Meanwhile, Omnilayer is a safe and reliable on-chain smart asset issuance system. Building Lightning Network channels on it automatically acquire the capacity to temper resistance, issue assets, and on-chain settlement. This is the foundation of OmniBOLT.

The post What Bitcoin’s Lightning Network Means for Tether first appeared on Cryptoknowmics-Crypto News and Media Platform.

The post What Bitcoin’s Lightning Network Means for Tether appeared first on Cryptoknowmics-Crypto News and Media Platform.

Time Stamp: April 15, 2022