ADSactly Crypto: What Is The Bitcoin Liquid Network?
ADSactly Crypto: What Is The Bitcoin Liquid Network?
Bitcoin may be the first cryptocurrency to launch the blockchain revolution and in its 11-year run has opened up entirely new ways of thinking and running business. However, not much has changed in terms of improving the network since its launch.
Yes there have been minor improvements and the launch of the lightning network side chain, but for some, the changes are far to slow, and that's why altcoins have become so popular.
Bitcoin has its shortcomings and will never be able to handle everything we want it to do or please everyone, but there are some exciting spin-offs on the Bitcoin Network that is starting to make it a lot more versatile.
One of those spin-offs comes in the form of a sidechain known as the liquid network.
Image source: - newsbtc.com
What is the liquid network?
Liquid Network is a bitcoin sidechain is targetted at helping institutions wanting to put their money into Bitcoin. Its aims are to offer fast and confidential transactions between significant trading platforms, which is fast and cost-effective for large investors wanting to take advantage of the blockchain space.
Liquid Network: What is used for?
It has been pointed out several times that the current BTC blockchain cannot support high performance and high-frequency trading, which therefore limits the scalability. The liquid Network aims to make it possible by offering a sidechain consist of more transactions per second and shorter confirmation times. The move to a side chain results in fast transfers at low prices.
- Instant transfers between Exchanges, Market Makers and wallets
- Better efficiency for traders
- Use of the L-BTC pegged token anchored to a bitcoin counterpart frozen in the appropriate swap wallets
- Verifiable Auditing: The Liquid Network users must verify the proofs of a reserve of the various assets provided by the exchanges
- Confidential Transactions
- Guarantee and reliability, since the Liquid Network’s private nodes are all managed by reliable entities
- Less decentralisation. Since there are just a few large entities operating the sidechain
How the liquid Network works?
So instead of an institutional investor buying and trading on various exchanges which is highly inefficient. So instead they take their funds and secure it with the Luaid Network.
The Bitcoin is then pegged to the L-BTC token which can then be traded instantly with other wallets on the network and later exchanged for the BTC when needed and then removed from the Liquid Network and moved back tot he main chain wallet.
How did the liquid Network get started?
The project was launched in 2015, and 2 years later its testnet went up in May 2017. Its version 1.0 of Liquid Network only made its debut on the bitcoin network in October of 2018.
There are several institutions already on the Liquid Network including The Rock Trading, BitMEX, BnkToTheFuture and Bitfinex who want to add their US dollar-pegged stablecoin Tether on the Liquid Network.
Keeping it liquid
What do you think of Liquid Network? Is it a good idea to help bring more institutional money into the Bitcoin Network? Or does this go against the ideals of decentralisation? Let me know in the comments below.
Sources
Written by @chekohler
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Apparently the liquid network has been a success! Of course, I have the idea that anything that has to do with BTC represents a sure success. My curiosity is that even though you say there are verifiable audits, there is a chance that some companies or individuals may launder money? Thank you for always keeping us informed about crypto currencies, @chekohler. Happy New Year to you.
I wouldn't say its the greatest success but it does show that the Bitcoin Network can be used as backbone for larger trades and I'm sure future applications will come of it. I'm sure they launder money, every large money institution does, these are all arbitrary rules set up by these central bodies for us to abide by but for them to break sadly. But it's not inherently bad to launder money, it's only seen as bad because of the regulations in place that make it illegal. I think we need to look at money for what it is, completely agnostic and it's not good or bad it just funds our intentions
Happy new year to you too and I hope 2020 will bring on new heights for you too :)
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