Elon Musk, despite recently reversing his company’s decision to use bitcoin for transactions, remains keenly interested in the cryptocurrency and has suggestions.
He said the bitcoin network could better handle the rising demand with help from the Lightning Network, a payments platform that’s faster and less expensive.
“Bitcoin hashing (mining) energy usage is starting to exceed that of medium-sized countries. Almost impossible for small hashers to succeed without those massive economies of scale,” he tweeted Friday. “For now, Lightning is needed.”
Lightning processes bitcoin transactions outside of the bitcoin blockchain to lighten the load on the network.
Musk had specifically cited the environmental impact of mining and a reliance on Chinese miners in Tesla’s reversal on bitcoin recently.
Without Lightning, according to decrypt.com, it costs an average of $13 in fees and takes 14 minutes to move funds across the Bitcoin network.
Musk said the layer 2 Lightning Network is “needed” for now.
“Layer count depends on projected bandwidth & compute, both rising rapidly, which means single layer network (bitcoin alone, for example) can carry all human transactions in future imo,” the Tesla CEO tweeted Friday.
The Lightning Network is a layer atop the blockchain that leverages user-generated channels for sending and receiving payments.
Northern California-based Lightning Labs started building Lightning in 2016. Investors include Twitter and Square CEO Jack Dorsey.
Concerns about Lightning include decentralization.
“Achieving truly decentralized finance – power to the people – is a noble & important goal,” said Musk, in response to BTCSession, a crypto YouTuber who had asked whether Musk had considered whether Lightning sacrificed on decentralization.
Musk, whose Twitter activity has proved capable of creating big market swings in the crypto world, has not adversely affected bitcoin prices. As of noon ET on Friday, it stood at just more than $37,000.