Lightning Enables Global Payments
At the Pacific Bitcoin Conference two weeks ago, I wanted to learn more about the Lightning Network, a layer 2 payment protocol on Bitcoin. Lightning promises to disrupt the global payments system with faster, cheaper transactions that can be executed between peers.
Among the people I met, Graham Krizek stood out for his practical development of Lightning technology for the enterprise. This week, Krizek was interviewed by NLW for The Breakdown. Here's my TLDR of their conversation, which you can listen to at "Why Lightning Isn't Just for Bitcoin Believers."
The Lightning Network runs on Bitcoin and shares its low time preference ethos. Its developers take extra time to get the technology right. They build a platform to do no harm, compared to the Silicon Valley ethos of move fast and break things.
The no harm design center comes from the need to serve people in impoverished countries who need a way out. Unlike the existing global system, Lightning enables censorship-resistant peer-to-peer payments. Those who start from Bitcoin easily grok this comparative benefit.
As an open technology standard, the Lightning Network benefits from a broad community of developers who add different functionality. Today they strive to increase liquidity, the ability to send and receive payments over the network.
Liquidity and other new technology for routing enables rapid adoption. Over time the community will create an easy-to-use payments system, like a Venmo or Visa, that allows people to hold (self custody) their funds and transact peer-to-peer without anyone in the middle.
Krizek's company (Voltage) offers its enterprise customers, 1) a node hosting service, 2) observability, 3) dev tools and 4) liquidity. These capabilities help its customers more quickly use the network to gain its benefits.
What’s the value proposition? Game companies can pay out rewards. Exchanges can offer fast withdrawals. And generally, global payments are faster, cheaper and final. When you combine the finality, the speed and the low fees, it's a no-brainer.
Is there a blocker to adoption? Krizek speaks to the challenges associated with Bitcoin price volatility. People live in their local currency. That is why a stablecoin built on top of Lightning is a very interesting use case.
How does one get involved with Lightning? Just get started. Download an application like Moon or Phoenix. Use it on an exchange or one of many services. Read the Voltage blog and consider how to adopt it for your business. Evolve your future on Bitcoin.