Many people in Africa have difficulty dealing with the rising Bitcoin costs, while those who currently use stablecoins and lightning transactions are unaffected.
Since transaction costs for Bitcoin (BTC) have increased to their highest level in nearly two years, African users are increasingly turning to the Lightning Network and stablecoins.
The Lightning network was constructed on top of the original Bitcoin network to facilitate faster transaction processing.
Many people on the continent have been utilizing these tools, so they weren’t very concerned about the fee spikes. However, others have noted that even Lightning network wallets have experienced instability.
Prefer moving their transactions through stablecoins like USDT, while folk with low volume transactions now prefer lightning network transactions over the base layer transactions,
according to Heritage Falodun, founder of Africa-focused OTCP Digioats, due to the higher fees.
Ordinals, a Bitcoin protocol that enables the production of non-fungible tokens and BRC-20 tokens (associated with certain meme coins) on the Bitcoin network, are likely to blame for at least some of the substantial rise in transaction costs.
Lorraine Marcel, the Kenyan creator of Bitcoin DADA, an initiative to educate women in Africa on crypto, claimed that daily users of Bitcoin for transactions like cross-border payments and remittances have been substantially impacted. She also said that
Most educators prefer onboarding newbies onto the unchain network as it offers self-custody,
while the Lightning network is unfamiliar to most Africans.
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Mary Imasuen of Lagos, Nigeria, who hosts the Bitcoin Gamer Chat Podcast, said that although the total sums of transaction fees may appear tiny to people in the West, for individuals in African nations with poor economies, it is a substantial hardship.
Commercial people are also impacted. In an interview with CoinDesk, Kgothatso of the Machankura wallet lamented
most exchanges that operate in Africa don’t yet have lightning
a lot of traders are still waiting for transactions from three days ago to confirm.
At the same time,
some trades are too expensive to settle.
Node operators in Lightning are also experiencing issues. Imasuen said,
The Bitcoin fees have made opening a channel to the node more expensive than it was before.
From the perspective of those in Africa, where our currency is constantly devaluing, that cost is not small,
This may cause the network to become less decentralized over time. According to Nikolai Tjongarero (co-founder of EasySats and BTC Mining Namibia): “Fewer “ordinary people” would be able to “operate functional nodes without employing a highly paid LSP [lighting service provider],” which might lead to more centralization on Layer 2.