Scaling cryptocurrencies has been a very problematic endeavor for most of 2017. In fact, it has been a problem ever since Bitcoin was created but only became more apparent in recent years. While most people are waiting for the Lightning Network to arrive, there’s another possible solution on the horizon. Bolt allows people to conduct anonymous micropayments. It is a solution well worth looking into, even though it has no official release date yet.
In the world of finance and technology, one should never put all his or her eggs in one basket. This definitely applies to cryptocurrencies and potential scaling solutions. In the Bitcoin ecosystem, many people have high hopes for the Lightning Network. That is only normal, as it introduces micropayments, which can be conducted through bidirectional payment channels. With very low fees and faster transactions, the Lightning Network may finally provide the scaling solution Bitcoin desperately needs.
At the same time, there are a few issues with the Lightning Network as well. Real-world implementation of this type of technology will always be a problem. After all, the Bitcoin ecosystem failed to perform the necessary upgrade SegWit upgrade on a large enough scale to make an impact. As LN requires SegWit to work properly, it will be interesting to see if it raises more problems along the way.
Furthermore, there’s always the question of whether or not scaling solutions are indeed decentralized. While Bitcoin and other cryptocurrencies are all about decentralization, network infrastructure often paints a very different story. With most network nodes being hosted on a handful of services, there’s no reason to think things will be different for Lightning Network intermediaries. In fact, it may even become a bigger problem than before. That’s far from ideal, which makes it worth one’s while to look into alternative scaling solutions.
This is where Bolt comes into the picture. On paper, it follows a similar path as the Lightning Network but adds the element of anonymity. While not everyone may have a need for anonymity when using cryptocurrencies, there are always people who prefer to keep everything off the book. According to the Bolt whitepaper, the recipient, sender, and intermediary of any payment channel will know nothing about one another. In theory, the intermediaries won’t even know the transaction amount, which is a very nice feature.
Some people may wonder if there is even a need for this degree of anonymity. In a perfect world, the obvious answer would be negative. Sadly, we don’t live in a perfect world, especially not where cryptocurrencies are concerned. Bolt aims to achieve anonymity by implementing zero-knowledge proofs and blind signatures. This involves signing encrypted data without knowing or having to know what the data entails exactly. It is blind trust, so to speak, something very few people would ever expect to see in the world of Bitcoin and cryptocurrencies.
Perhaps the most important aspect is how Bolt isn’t only suitable for Bitcoin. There are specific requirements to adhere to, but any eligible cryptocurrency can make use of Bolt – that is, assuming this project is ever fully developed, as there is still a lot of work to be done in that regard. It’s good to have some competition for the Lightning Network, as it may not deliver exactly what most people expected. Competition is a good thing, as it will bring out the best in all developers.
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