- Jack Dorsey is working on a kit that can help integrate Lightning Network to bitcoin wallets.
- Dorsey’s Square won a patent for a crypto-to-fiat payment system.
- Bitcoin can take multiple roads to a multi-trillion dollar valuation.
Tim Draper has not backed off his prediction that bitcoin will skyrocket to $250,000 in 2023. The venture capitalist who invested in Skype, Tesla, and SpaceX believes that key improvements happening on the Bitcoin network will catalyze the surge in valuation. Developments such as the Open Node and Lightning Network are helping bitcoin’s cause. Nevertheless, Draper believes that more engineering needs to be done so that the number one crypto can become a widely-used currency.
Fortunately, Jack Dorsey is hard at work to help create the infrastructure so that bitcoin can become the “native currency” of the internet.
Dorsey Working on a Lightning Development Kit That Can Improve the Bitcoin Network
Draper believes that bitcoin can get to $250,000 if people start using it for day-to-day payments. Currently, the top cryptocurrency is having a huge problem with scaling. It can only process seven transactions per second. This means when buying coffee, it will get cold before the merchant receives payment.
The good news is that Twitter and Square CEO Jack Dorsey is developing solutions to supercharge bitcoin’s throughput. Earlier this month, Square Crypto announced that its team is developing a Lightning Development Kit (LDK).
Lightning is a layer-two solution built on top of the Bitcoin network that makes payments faster and cheaper. Take a look at Lightning Network in action below:
The Lightning Network has the potential to process millions of transactions per second (TPS). It can dwarf Visa’s 45,000 transactions per second.
With the LDK, developers can easily integrate Lightning to their wallets. Imagine instantly paying someone halfway across the world with a few clicks. That’s the promise of bitcoin and the Lightning Network.
Dorsey Wins Patent for Fiat-to-Crypto Payment Service
While the Lightning Network can process payments in a blink of an eye, bitcoin still suffers from volatility. Merchants will think twice to accept a currency that can be devalued by 10% in a few hours. Dorsey appears to have a ready solution for this issue.
Messari reported that Dorsey’s Square won a patent for a payment network enabling users to conduct fiat-to-crypto transactions. The customer can pay in bitcoin and the merchant can seamlessly convert it to U.S. dollar or any currency.
Do you see what’s happening here?
Dorsey is single-handedly building the infrastructure that can catalyze widespread adoption. With instantaneous payments that can be converted into any currency, both customers and merchants have no reason to deny bitcoin as a payment option.
Draper’s $250,000 Bitcoin Prediction Sounds Possible
For bitcoin to get to $250,000, it must have a market cap of over $4 trillion. It may look impossible, but not if you do the math.
The global money supply stands at $80 trillion according to the CIA World Factbook. Bitcoin only needs to capture a mere 5% of the money supply to get to a market cap of $4 trillion. Draper said that once network improvements take place, no one will want to use fiat currency. The venture capitalist quipped,
And the reasoning is that all these merchants don’t want to lose four percent every time you swipe your credit card.
While Draper focuses on merchant savings, Ark Invest revealed that bitcoin can be valued at over $3 trillion because of its three main use cases.
First, bitcoin can act as a medium of exchange and it can ignite currency demonetization in emerging markets. Second, the cryptocurrency can capture a significant percentage of gold’s market cap. Bitcoin is a much better store of value asset than the precious metal. Lastly, high net worth individuals can invest a small percentage of their wealth in bitcoin as insurance against asset seizure.
Overall, the future looks rosy for the king of cryptocurrencies. Whether it reaches Draper’s lofty valuations is a huge unknown.
Disclaimer: The above should not be considered trading advice from CCN.com. The writer owns bitcoin and other cryptocurrencies. He holds investment positions in the coins but does not engage in short-term or day-trading.