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- Synonym’s efforts are pushing the design landscape on Lightning to new heights, which is exciting to witness. It will be fascinating to observe how the use of OP Return, which Omni Layer uses, creates natural scalability ceilings that make this use case a transient blip in the life of bitcoin.
- Tether is centralized because it is controlled by a corporation that maintains a reserve of USD and other assets (including bitcoin) that are reported to back each Tether with a USD equivalent.
- Synonym’s version of Tether on Lightning is unique in that it uses the Omni Layer protocol, which is where Tether was first released. In the years since Tether’s introduction of Omni Layer, on-chain costs have risen.
Synonym, a Bitcoin startup, has utilized the Lightning Network to make a Tether transaction, paving the path for Bitcoin-based stablecoins.
Tether Being Centralized Since It Is Managed By Such A Company Which Keeps Significant USD Deposit
Tether, for those who are unfamiliar, is a US Dollar stablecoin that exists outside of the established financial system and is traded over cryptocurrency networks. Tether being centralized since it is managed by such a company which keeps significant USD deposits and other assets (including bitcoin) that are reported to back each Tether with a USD equivalent. Tether has been pursued by the US government for years because it has effectively functioned outside of the regular system while supplying people all around the world. All of this is to imply that I would only retain Tether if it was absolutely required to earn a profit.
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With that stated, there is little doubt that Tether is in high demand around the world as people attempt to escape bitcoin’s short-term price volatility. Many people in emerging economies don’t have the luxury of sitting back and stomaching bitcoin’s wild price swings, so they park some of their holdings in stablecoins, where they can keep their money without worrying about not being able to buy what they want when they go to use it. Although many bitcoiners dislike this truth, it is one that must be accepted.
Synonym’s version of Tether on Lightning is unique in that it uses the Omni Layer protocol, which is where Tether was first released. In the years since Tether’s introduction of Omni Layer, on-chain costs have risen. Tether’s usage shifted to other chains to take advantage of their lower costs, and the two have been playing a hot potato game ever since. From one chain to the next, I’m hopping from one to the other.
Synonym’s Efforts Are Pushing The Design Landscape On Lightning To New Heights
Is Synonym’s Tether on Lightning implementation anything that will drive Tether usage back to the bitcoin stack, given that the Lightning Network now offers sufficiently cheap costs on top of the world’s most secure ledger? We’ll have to wait and see. Even though your Uncle Marty believes that the USD is failing miserably and that stablecoins serve as nothing more than a transitional mechanism that provides a bit of volatility cover as we move from a fiat standard to a bitcoin standard, he thinks it would be cool to see Tether (or general stablecoin usage) migrate back to bitcoin.
At the very least, Synonym’s efforts are pushing the design landscape on Lightning to new heights, which is exciting to witness. It will be fascinating to observe how the use of OP Return, which Omni Layer uses, creates natural scalability ceilings that make this use case a transient blip in the life of bitcoin, as we discussed yesterday in relation to BIP47 being implemented in the Bitcoin Dev Kit.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
