A Bitcoin bull run is exciting for all involved. The last major bull run saw Bitcoin run from about $1,000 in January 2017, peaking at almost $20,000 in December 2017.
And while the excitement of a bull run can’t be matched, if not fixed, the problems on the Bitcoin network are a worry.
With more money coming in, it obviously means more people and more transactions, and in the past a heavily congested network.
Bitcoin is worked on every day, and upgrades have been and are breing introduced, but will it all be enough for the next FOMO bull run?
Is Bitcoin Ready to Handle Another FOMO Bull Run?
The bull runs are exciting and entice lots of new investors who FOMO in, and with the Bitcoin block size struggling to handle the influx the backlog causes the mempool to inflate.
The mempool is where all Bitcoin transactions are sent and await confirmation. And the people willing to pay a higher transaction fee jump to the front of the queue, which during bull season pushes the price up a lot.
At the moment, there are about 340,000 transactions a day on Bitcoin, but at the peak of the bull run in December 2017, there were about 490,000 in a 24-hour spell, and fees reached as high as $56.
The Lightning Network Will Help Ease The FOMO Congestion
Back in December 2017, we didn’t have layer two solutions such as Lightning Network. The Lightning Network is designed to reroute on-chain transactions whilst reducing the load on the Bitcoin mainchain, and at reduced fees.
Although it launched in 2017, it wasn’t anywhere near as significant as it is today, and had hardly any impact back then. But liquidity and volume on Lightning is growing and capacity on the network is around 900 BTC.
While this is a tiny amount of BTC, it shows the growth in popularity of Lightning. And even more tellingly, when Bitcoin rode up over $13,000 last year, there was an increase in in Lightning transactions, indicating users are willing to move onto the Lightning Network if necessary.
Exchanges Will Use Liquid Network To Free Up The Bitcoin Network
Liquid Network is another layer two solution that is easing up strain on the Bitcoin network.
Where Lightning is a protocol built on top of Bitcoin, Liquid Network is actually a sidechain that offers almost instantaneous and free transactions, and more confidentiality with Bitcoin transactions.
Built by Blockstream, Liquid is a payment network designed for exchanges, and is actually run by a centralized group of nodes, which consists of exchanges, trading/brokerage firms, and wallets.
Exchanges that use it will free up space on the Bitcoin mainchain and be able to offer their users much cheaper and faster BTC transactions.
With Liquid, User send BTC to the Liquid Network and have them converted to LBTC, which represents the BTC locked up.
At present there are about 2000 BTC locked up on the Liquid Network, and all transactions are carried out on Liquid, until a user wants to convert LBTC back to BTC.
SegWit, Schnorr, Taproot Are Helping Bitcoin Scale
As well as the Lightning and Liquid Networks, SegWit, Schnorr, and Taproot updates are all reducing the strain on the Bitcoin network, and these updates are being utilized by more nodes, every day.
SegWit (Segregated Witness) is an update that is designed to help increase the block size limit on Bitcoin by pulling signature data from Bitcoin transactions. In doing so, it’s freeing up space in the Bitcoin network.
The main advantage of Schnorr is that when multiple keys are used to sign the same message with Schnorr, the signatures can be combined into a single signature. This will significantly reduce the size of multisig transactions.
Taproot is an update proposal that will enhance Bitcoin’s scripts, a set of instructions attached to each transaction that explains how the funds can be used. The update is set to extend on Schnorr’s functionality to enable greater scaling, efficiency and spending policy privacy, and is expected soon.
Bitcoin Will Better Handle The Next FOMO Bull Run
While the 2017 Bull Run was astronomical, so were the transaction costs at the peak of the bull run. You can’t say Bitcoin couldn’t handle that much interest, because it did, it just took more time and money to send transactions
Not good if you want to spend your BTC as everyday currency, but Bitcoin isn’t that, yet. It’s still finding its place, firstly as a store of value, but things are changing.
Layer two solutions are easing up the network, and bringing down waiting times and costs for BTC transactions. These networks are growing rapidly, and as it continues so will Bitcoin’s ability to scale.
Other updates such as SegWit, Schnorr and Taproot might not be the scaling solution for all Bitcoin’s problems but they are helping massively. And all combined are having a major impact on the Bitcoin network.
Many are expecting an upcoming bull run in this cycle, and Bitcoin is much more advanced than 2017. Will it be able to handle the FOMO influx? I guess that depends how big the FOMO horde is.
But one thing is sure: Bitcoin is always ready.
How can I get free bitcoins?
Nothing is really free, because even when you earn free Bitcoins you’re giving up your time, which is precious. But you can earn free Bitcoins. If you are a gamer, there are games like Bitcoin Bounty Hunt which allows you to shoot your way to Bitcoin riches. Or you can save your Bitcoin in an interest bearing account and earn some BTC interest. Be careful with these, and only go with legitimate companies, though.
How long does it take to mine 1 BTC?
On average, the time it takes for miners to mine BTC is 10 minutes. But they don’t just mine 1 BTC. Mined Bitcoins are created with every new block and these produce the Bitcoin block reward which at the moment is 6.25 BTC, so you could say it takes less than 2 minutes to mine each Bitcoin.
How do you make money with Bitcoin?
There are many ways to make money with Bitcoin. The most obvious way is to mine Bitcoin. Bitcoin mining is the process of verifying transactions, and helping to secure the Bitcoin network. Bitcoin miners are rewarded with bitcoins for their work.
Is Bitcoin legal?
As of July 2020, Bitcoin is legal in most countries. The US, UK, Canada, Japan, and all other developed nations it is very much legal. However, the legal status of Bitcoin varies in other jurisdictions.
A Bitcoiner since 2017 and a Bitcoin Maximalist since 2018, Tommy is our main writer and editor at Bitcoin Maximalist. Other than researching and writing about Bitcoin, Tommy loves spending time with his family and supporting his beloved Leeds United.