Bitcoin news: PSBT arrival on Lightning Network

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Bitcoin News: In this article, we take a look at the latest developments in 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, Bitcoin Enhancement Proposal 174 introduced an innovation that reliably facilitates multisig, CoinJoin, and other types of more complicated transactions.

Let’s see all the details together.

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

The latest bitcoin news is about payment company Strike expanding its reach of cross-border money transfers via the Lightning Network.

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

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

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

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

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

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

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

The statement reads as follows:

“Strike’s expansion into Mexico provides a better alternative for 12 million Mexican Americans.”

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

Lightning Network Developments

Lightning Network developments continue smoothly within the Bitcoin community.

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 amounts, which can still be easily executed on the core layer.

Network capacity has increased significantly compared to previous years, with a rapid increase from the second half of 2021.

Today, Lightning Channels can accommodate a whopping 5,410 BTC, which is a current equivalent of $134.8 million.

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

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

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

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

The share then fell slightly to its current value.

Note that on May 5, 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.

Bitcoin News: Introducing the PSBT Standard

PSBT (Partially Signed Bitcoin Transaction), introduced in BIP-174 by the developers of Bitcoin Core, 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 portability of verification for signers.

Thanks to PSBT, a complete transaction can thus be carried out by combining the respective entries given to several signatory parties, which individually would not have been able to verify the tx.

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

Interoperability: PSBT promotes interoperability between different wallet software. For example, a user who does not have access to the keys necessary 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 at again to transmit it into a Bitcoin node.

Signing from cold wallets: PSBTs make signing from devices not connected to the internet more secure by transmitting metadata from cold wallets to addresses exposed to the internet. This helps “cold” devices verify addresses and amounts sent

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

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

The PSBT particularly facilitates 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 version 2 of the PSBT is under development.

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

We look forward to future developments on this type of transaction that simplify the user experience by providing more opportunities for interaction between the signing parties.

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