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Bitcoin’s Liquid Network will serve as enterprise settlement layer for near future

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Bitcoin’s Lightning Network and Liquid Network have been making headlines for quite a while now. The latter being a sidechain-based settlement network and the former being a second-layer payment protocol, both have grabbed the attention of several exchanges in the cryptocurrency market. Both subjects were recently touched upon by Paolo Ardoino, CTO of Bitfinex and Tether, in an interview with Ivan on Tech.

During the interview, Ardoino was asked about whether or not the Liquid Network is mainly for exchanges for inter-exchange operations, considering that users “do not interface with the Liquid Network,” as opposed to Omni, Ethereum, Tron or even EOS. This question was asked considering the fact that Tether was recently launched on top of Liquid Network, expanding its presence to five platforms.

To this, Ardoino stated that he believes that the Liquid Network is a “great product” as it relies on Bitcoin‘s security. However, he said, the plus point is that the block time is lower, as opposed to the king coin. The CTO added that it is also easy to issue new assets on Liquid, while enjoying the benefits of confidential transactions. He stated that the network is generally used for B2B settlements, which were in “big sizes,” while pointing out that the Lightning Network had “limiting size for the channel.”

Further, Ardoino stated that the Liquid Network would “serve” more like an “enterprise settlement layer” in the short-run, while the Lightning Network would tend more to “peer-to-peer micropayments side.” He said,

“so we had to roll out for our integration with Bitrefill, a special node with tweaked channel size, while with Liquid you can do any size on Bitcoin and without any required changes […] I see at least for the near future that liquid will serve a bit to be more professional or Enterprise settlement layer [..]”

Subsequently, the CTO of Bitfinex also spoke about the exchange integrating with Chainalysis in order to keep bad actors at bay, while protecting users’ privacy. He stated that this integration is “good” for the platform as its compliance team would be able to ensure that the exchange will not be receiving funds that have been obtained via hacks in the past or present, while also avoiding transactions processed by scam projects.


Priya is a full-time cryptocurrency writer at AMBCrypto concentrating mostly on privacy coins. A graduate in economics, Priya focuses on developments on Ethereum and blockchain technology.
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