RATE Group | Blockstream’s New Solution To Bitcoin’s Liquidity Problem Looks Oddly Familiar
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Blockstream’s New Solution To Bitcoin’s Liquidity Problem Looks Oddly Familiar

11 Oct Blockstream’s New Solution To Bitcoin’s Liquidity Problem Looks Oddly Familiar

Posted at 21:05h in Bitcoin News by

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Bitcoin is illiquid. Proof of work is appallingly slow and expensive, and the fragmented cryptocurrency market structure means that there is a chronic shortage of liquidity. Furthermore, all transactions are visible to everyone, which makes markets volatile and invites front-running. Consequently, using Bitcoin for high-volume transactions is a nonstarter.

This is not my opinion. It is Blockstream’s.

HONG KONG – 2018/10/02: A smartphone displays the Bitcoin USD market value on the stock exchange via the Yahoo Finance app. (Photo by Guillaume Payen/SOPA Images/LightRocket via Getty Images)

Blockstream’s comment is in the “Strong Federations” whitepaper, which underpins its Liquid sidechain. The actual statement is in geek-speak, of course:

Bitcoin currently facilitates remittance and cross-border payment, but its performance is hampered by technical and market dynamics. The high latency of the public Bitcoin network requires bitcoin to be tied…

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