Thoughts on scaling #Bitcoin.

Bitcoin has recently experienced a surge in value, stirring excitement and speculation among investors and enthusiasts. This may be fueled by the buzz surrounding the potential approval of Bitcoin Exchange-Traded Funds (ETFs) and/or the much-anticipated halving event.

As interest grows, the conversation inevitably turns to a crucial aspect of Bitcoin's future: scaling.

As an estimate, let’s say the Bitcoin on-chain network gets us about 500,000 daily user transactions.

The #LightningNetwork is designed to scale this by setting up payment channels that can be used for many transactions and only occasionally settling on-chain for channel openings and closings.

In order to use Lightning in a non-custodial fashion - meaning the user has their own secret keys - at least one channel needs to be set up with each user.

Let’s say the Lightning Network, as a non-custodial platform, will allow us to scale up to millions of daily users. It’s a pretty reasonable number. One could see a future where the majority of Bitcoin on-chain transactions are only Lightning channel openings and closings.

However, there is no way that the Bitcoin Network will support global adoption with non-custodial Lightning users. There aren’t enough spaces in bitcoin blocks to support anywhere near one channel per human on the earth. Not even close.

So let’s say Lightning is the solution that is going to get us to millions of daily Bitcoin users, what comes next?

What is the tech, or the combination of tech, that gets us to billions of daily Bitcoin users?

This may sound a long way away, but people are thinking and working on potential solutions right now.

Some of the most promising are channel factories, Fedimint, Cashu and Ark.

Essentially, we can foresee a future where the Lightning Network is a settlement for a trust-minimized Layer 3, similar to how Bitcoin is a settlement layer of Lightning now.

The journey of Bitcoin's scalability is likely to extend far beyond the Lightning Network.

If Bitcoin is to gear up to serve billions, the exploration and integration of innovative technologies like channel factories, Fedimint, Cashu, and Ark become critical.

They, along with the Lightning Network, point to a future where Bitcoin could become a key component in a global, decentralized and more secure financial system.

We'd love to know what you think Stackers.