Bitcoin news: all the developments on the Lightning Network and the introduction of the PSBT standard



Bitcoin news: in this article we delve into the latest developments regarding the Lightning Network and see how the PSBT (Partially Signed Bitcoin Transaction) standard works.

Strike is implementing new features to enable more convenient payments between US and Mexican citizens.

Meanwhile, the Bitcoin Improvement Proposal 174 introduced an innovation that facilitates multisig, CoinJoin, and other types of more complicated transactions reliably.

Let’s look at all the details together.

Bitcoin news: Strike expands cross-border payments between the US and Mexico via the Lightning Network

The latest Bitcoin news talks about the payment company Strike, which is expanding its reach of cross-border money transfers through the Lightning Network.

The “Send Globally” service, which allows FIAT currency to be sent between different countries around the world using Bitcoin’s blockchain, was activated just yesterday in Mexico.

This allows US residents to use the Strike application to send US dollars to Mexico, received in pesos currency in the recipient’s bank account.

Outbound dollars are converted to Bitcoin to enable a P2P funds transfer in a Lightning channel and are then exchanged for Pesos upon receipt.

The advantages of using the crypto channel are many: first, the money is sent immediately and there is no waiting or verification time.

In addition, this step costs much less than traditional cross-border payment providers that charge high fees to poor Mexican migrants who wish to send money to their family members in Mexico.

The latest implementation by Jack Mallers’ company represents a huge step forward given that the United States covers about 95% of the remittance market in Mexico.

Mallers himself, in connection with the news, said in a statement to the Coindesk news portal that Strike has abandoned third-party service providers, preferring to adopt in-house custody strategies for transferred assets.

The statement reads:

“Strike’s expansion to Mexico brings a better alternative to 12 million Mexican Americans.”

The Send Globally service is available in 65 different countries, and the latest landing in Latin America further strengthens the payments app and awareness of Bitcoin and the Lightning Network.

Lightning Network developments

Lightning Network developments continue smoothly within the Bitcoin community.

The Layer 2, which facilitates the exchange of assets on the Bitcoin blockchain by providing immediate executions and negligible fee costs, is increasingly being adopted by private entities and entities to expand the possibilities for monetary exchanges.

In particular, the protocol is suitable for transferring a small amount of money while it is not recommended for large sums, which can still be executed conveniently on the main layer.

The capacity of the network has gone up a lot compared to previous years, with a rapid increase starting in the second half of 2021.

Today, Lightning channels can accommodate a whopping 5,410 BTC, representing a current countervalue of $134.8 million. 

The figure is still extremely low to compete with traditional micropayment channels, but the trend is in the right direction.

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Another very interesting figure to mention in the development of Bitcoin’s layer 2 network concerns the number of Lightning nodes installed to date.

Right now there are about 17,400 nodes, while the all-time high recorded is almost 20,500 channels in March 2022.

Recently, particularly between 4 and 5 May, we saw a crazy increase in the number of nodes in the network, from 15,463 to 17,853.

The share then decreased slightly to its current value.

Note that on 5 May, BTC closed the daily candle with a price of $29,500 (local top) while it is now in the $25,000 area.

We hope to see channel additions of this magnitude more frequently.

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Bitcoin News: PSBT standard introduced

PSBT (Partially Signed Bitcoin Transaction), introduced in BIP-174 by the Bitcoin Core developers, is a standard that simplifies the signing of a transaction at different times between multiple parties.

The format is particularly useful for inserting metadata into a transaction and facilitating verification portability for signers.

Thanks to PSBT, a complete transaction can thus be achieved by combining the respective inputs given to multiple signing parties, who individually would not have been able to verify the tx.

The advantages of this standard are varied by making multi-signature transactions more easily verifiable. In detail we find positive aspects in the following areas:

Interoperability: the PSBT promotes interoperability between different wallet software. For example, a user who does not have access to the keys required for signing (watch-only) can export a PSBT file and import it into a wallet with the required decryption keys, and once signed, explore it again for transmission into a Bitcoin node.

Signing from cold wallets: PSBTs make signing from non-internet-connected devices more secure by passing metadata, from cold wallets to internet-exposed addresses. This assists ” cold” devices in verifying addresses and amounts sent

Multisignature: PSBTs are particularly useful for coordinating multiple parties who want to sign the same transaction. 

The standard presents a particular method of constructing the tx by passing different inputs between different signatories and assembling it in the final stage of transmission. 

The PSBT is particularly facilitating the execution of CoinJoin (a privacy-preserving mixing protocol) and other transactions where cooperation between multiple parties is required.

At present, the standard still has some drawbacks and PSBT version 2 is under development

In particular, the main problem concerns the relatively large size of files transmitted in the protocol, especially for hardware wallets that do not have a large memory capacity. 

We eagerly await upcoming developments on this kind of transaction genre that simplify the user experience by giving more possibilities for interaction between signatory parties.