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Peter Zimmerman
Federal Reserve Bank of Cleveland
2020
Ride the Lightning: Turning Bitcoin into Money

The author shows that recent technological innovations have improved the efficiency of Bitcoin as a means of payment. The paper explores a robust and significant association between reduced blockchain congestion since the beginning of the 2018, and adoption of the Lightning Network, a means of netting payments off the blockchain. This improvement cannot be explained by other factors, such as changes in speculative demand for Bitcoin.