Bitfinex CTO: Bitcoin is the real currency on the Internet and will become the basic engine for future financial applications

If Bitcoin is to replace fiat currency and become the most commonly used currency in the future, it needs to implement a large upgrade in terms of scalability. So far, the Bitcoin ecosystem seems to have proven its utility as a long-term investment vehicle, but for many investors, due to the increasing volatility shown by this cryptocurrency leader, this This statement is also not entirely convincing.

Bitcoin is the real currency of the Internet

Image source: Pixabay

In 2018, the Lightning Network was implemented, which is considered a big step in the right direction, as it will greatly increase the scalability of Bitcoin. The solution claims to increase the speed of transactions within the Bitcoin network, allowing it to operate at faster speeds and with greater efficiency.

In a recent issue of POV encrypted podcasts, Paolo Ardoino, CTO of Bitfinex and Tether, talked about the importance and future of Lightning Network. He sees the Lightning Network as a way to design the second layer:

"The Lightning Network is the second layer of design. Although many people think that it has been running healthy in test mode for a long time, it still has a lot of room for improvement, which is certain. But the stack technology also needs A lot of human and brain investment. "

However, Adorno also pointed out that although Lightning Network is suitable for mainstream adoption, it still has many challenges in terms of usability and user interface. Regarding the implementation of the Lightning Network by the exchange, he emphasized:

"Several exchanges have decided to support the Lightning Network so you can move bitcoins faster instead of trading on-chain. This will allow traders to better take advantage of the spread between exchanges for arbitrage."

However, according to Adorno, although Lightning Network is a well-designed second layer, he feels that Bitcoin is still a good foundation layer. He went on to say:

"I believe that Bitcoin will become the underlying engine for many financial applications."

However, if Bitcoin is to become the basic engine of financial applications, even if it has solved the problem of scalability, its volatile nature will still be a challenge. According to market data provided by skew, in the past week, the actual volatility of BTC / USD has increased sharply from 52% to about 72%.

Bitcoin's actual volatility

BTC / USD Realized Volatility Chart | Source: skew

For many investors and crypto traders, as Bitcoin has experienced extremely difficult times in the past few days, its unpredictability has become the focus again. According to the Fear & Greed index, sentiment analysis tools show that market sentiment is "extremely frightened" after the price fell the day before. This is usually a signal of bullish sentiment, but also represents a buying opportunity.

Panic Greed Index

Panic Greed Index | Source: alternative.me

However, for Adorno, despite Bitcoin's recent ups and downs, it remains an important part of the future of crypto. He added:

"Bitcoin will be the real currency of the Internet, which is exactly what I am looking for."