Back to the Bitcoin Future: Now's the Time to Build With Lightning 🚙⚡️🔌
Welcome to the latest edition of the Lightning Lab, a newsletter filled with Lightning Network updates, community coverage, and, of course, memes! In this issue, we discuss how the Lightning Network community continues to build and grow despite broader market turbulence, a State of Lightning report from Arcane Research, a call to action to build Decentralized Finance on Bitcoin and Lightning from Ross Stevens, Nic Carter, and Allen Farrington, and a host of new network statistics and ecosystem updates including a Bitcoin 2022 recap!
Back to the Bitcoin Future 🚙🔌
Summer 2022 has kicked off with global markets in turmoil: inflation at 40 year highs, real rates moving higher as the economy begins to slow, NASDAQ down 30% from all-time highs, and general strife in the altcoin market. At the same time, the Lightning Network has been unaffected as our community of builders continues to focus on building the future of money. Public network capacity has grown by 20% already YTD to over 4000 BTC, and, like Doc and McFly in a DeLorean getting struck by Lightning, we’re just getting started. 🤓
This past weekend, Ross Stevens, Nic Carter, and Allen Farrington wrote a paper titled “On Impossible Things Before Breakfast.” They follow-up an insightful critique of the Terra stablecoin collapse and DeFi in general with a focus on the signal in the noise: the Lightning Network, Taro making Lightning a multi-asset network, and the possibilities that will be built on said network. The authors want us to:
“Imagine an ecosystem in which the building blocks of financial and capital markets are freely accessible to all without navigation of technical bottlenecks or economic middlemen; in which their workings are transparently inspectable and auditable on the basis of free and open-source code; in which the architecture of all marketplaces operate on these principles; in which this constitution lends itself naturally to programmability at origin and interoperability thereafter; and, in which, due to the combination of the aforementioned factors, no individual or entity can maliciously or politically impact market activity in any form, including advantaging themselves or disadvantaging others.”
That’s the future we’re going back to, building an ecosystem of globally available, permissionless, and universally verifiable financial services. Already today, as the authors note, “The Lightning Network will allow anyone – individuals, SMEs, institutions, etc. – to send domestic or international payments of any size, with unlimited frequency, without bank intermediaries, nearly instantly, and essentially for free.” We look forward to expanding on that ecosystem with Taro soon. 🍠
Several weeks ago, Arcane Research published their State of Lightning Volume 2 report that went in depth on the usage of the Lightning Network, and highlighted exactly the builders that continue to propel us forward!
The report includes a foreword from the inimitable Lyn Alden, an Ecosystem Overview, aggregated transactional data from private Lightning companies, discussion about the fundraising activity in the Lightning Network, and a 🔥 update to their market map.
Their research uncovered a new data point in favor of one of our favorite themes: Lightning’s high utility-to-speculation ratio. The below chart shows Lightning payment volume in two categories: speculative usage with exchanges (gray) and non-speculative usage everywhere else (black).
This makes it even more clear that while speculators come and go, the Lightning Network has found product market fit with a core group of transactors who are growing its network effect by transacting on a daily basis. We discussed this network effect in depth last November, specifically how large capital increases in public network capacity are actually a lagging indicator of increasing network utility. This utility will only continue to grow as those transactors convince friends, local merchants, and new businesses to join the network. We can’t wait to see what this chart looks like in 6 months!
We highly recommend reading the full report to understand exactly what’s going on in the Lightning ecosystem, where growth is coming from, and what to expect next. Congratulations to Arcane Research for another great report, we look forward to more research institutions producing content like this as the network continues to grow! 📈
News & Updates
Robinhood, the popular stock and cryptocurrency trading app, announced its plans to integrate the Lightning Network into its platform for speedier BTC transactions. Imagine instantly transferring value from Robinhood to Kraken, no banks required! 🤯
Strike announced an integration with Shopify, who powers >1M merchants across 175 countries, a partnership with NCR, the world’s largest Point-of-Sale supplier, and a partnership with Blackhawk Networks, a prepaid payments provider for firms like McDonald’s and Wal-Mart. Merchant adoption of the Lightning Network is accelerating!
BitPay, an early Bitcoin payments provider, is now offering their customers the ability to receive payments over the Lightning Network. This is a testament to both the maturity of the network and the demand from users for the improved Bitcoin payment experience the Lightning Network provides over on-chain.
Lightspark, a new Bitcoin and Lightning infrastructure company founded by David Marcus (former cryptocurrency head at Meta and president at Paypal), announced a reported $175M fundraise co-led by Paradigm and a16z crypto.
Mash, the browser-based Lightning wallet that allows creators, builders, streamers to charge their users directly in a pay-as-you-go manner, announced they raised a $6M seed round co-led by Castle Islands Ventures and Whitecap VP.
Pnkfrg, a new gaming studio building mobile free-to-play (F2P) games on the Lightning Network, raised a $3M seed round led by LVP and Initial Capital. The studio based in Berlin and Helsinki includes team leads from the Candy Crush Saga.
Impervious successfully raised a seed round for the development of a mobile internet browser built on top of Impervious and future peer-to-peer (P2P) applications. Check a sneak peek of their browser capabilities at their Bitcoin 2022 announcement in Miami.
🐍 Thndr Games just reached 1,000,000 transactions sent via the Lightning Network as prizes to their players. Half of that only from the last 7 months!
📈 LN Markets doubled their volume of payments routed over the Lightning Network, during the past 6 months. For the month of May, they routed 33.58 BTC (>$1M) across 17,887 payments.
⚡️ OpenNode has generated over 74M invoices across their Lightning infrastructure in total. Here’s to one of the most experienced Lightning companies in the space, and to the next 74M invoices!
😁 Bitcoin Smiles reached the mark of 1000 contributors, totalling 1.93 BTC (~$80k) raised! Not a surprise that 98.7% of the donations were done over Lightning.
🐙 Kraken had 2,500 deposits and withdrawals and their routing node earned 1.6M sats over 3k forwards. Only several weeks after launch, they have the 5th largest LN node, with more than 150 BTC in capacity.
👀 Amboss shared they had over 200k unique visitors and over 1M page views in the past nine months. That’s awesome!
🗓️ Voltage’s Lightning node routed an average of 16.5M sats per day in the last 30 days.
➕ LightningNetwork+ reached 700+ BTC capacity opened through swaps on their platform designed to facilitate collaborative Lightning channel opens.
💎 Diamond Hands, a prominent Japanese routing node, forwarded 10k payments totaling 17 BTC ($500k) of volume in May.
☕ Morgan Stanley published a report entitled “Buying a Coffee with Crypto” where they discuss how Bitcoin over Lightning is "more practical" for small payments than a debit card. They also think the “first step towards mass adoption of crypto as a means of payment will be through stablecoins," sounds like Taro fans in the making!
🤳 CNBC published an article about an LN payment from their reporter in Miami to a Ukrainian refugee in Poland who was able to 1) download a mobile Lightning wallet 2) receive the payment and 3) withdraw the value in physical cash from a Bitcoin ATM all in less than 3 minutes. Amazing.
💳 Stripe launched an App Marketplace for merchants featuring OpenNode as one of its first applications! This will allow all Stripe merchants to convert their incoming payments to Bitcoin.
🍠 Nik Bhatia wrote a new article in his newsletter “The Bitcoin Layer” where he explored the implications of Taro and expressed his bullishness on the Lightning Network and the industry that has sprung up upon it.
🔌 Voltage announced two new products that have been under development: Surge, a monitoring product for insights and alerts, and their next-gen platform that promises to offer scalable Lightning nodes, APIs, developer tools, and more. They also announced a new Startup Program enabling early-stage startups to save on Lightning infrastructure costs in their first year!
📹 Vida is a new social network and communication platform where your followers need to pay an amount of sats to send you a message, watch your streams or call your phone. They’ve also integrated with the Strike API for USD payments.
⚡ Anita Posch is raising funds for Bitcoin for Fairness on Geyser.Fund, the Lightning-based crowdfunding platform. The aim is to support the growth of grassroots Bitcoin communities in emerging countries.
🚢 Noah, an all-in-one personal finance app powered by Lightning, just released their app for beta testers. Users can now send and receive bitcoin, have a savings account, or spend without selling their sats with the Noah card.
🇸🇻 Adopting Bitcoin announced their second conference in El Salvador on November 15–17th. It will be exciting to see the growth of Lightning in the country after a full year of grassroot initiatives and adoption!
🐂 Tauros, a Mexican Bitcoin exchange, is now integrated with the Lightning Network through a partnership with Ibex Mercado.
🇦🇷 Fiwind, an Argentinian exchange, enabled Lightning deposits and withdrawals, thanks to an integration with OpenNode.
💲 Voltpay is a new Point-of-Sale app in Australia that makes it easy for merchants to accept Lightning payments using a familiar shopping cart interface.
🌕 Moon introduced the ability to add user’s purchased cards to Apple Pay, Google Pay, and Samsung Pay. The new “Tap to Pay” functionality is available for US customers, who can now more easily live on Bitcoin.
🍊 Synonym released their Blocktank LSP, a set of software tools that businesses, apps, web platforms or Bitcoiners can use to monetize Lightning Network connections and automatically manage channel liquidity.
🔨 Amboss launched Magma, a peer-to-peer marketplace for channels on the Lightning Network. They included promises in each channel sale for duration and routing fee settings, and will monitor each channel closely and track performance for reputation.
🍾 Bottlepay introduced Lightning Multiplexer, an open-source SQL-based external invoice database for LND with multi-node receive support. Exciting to see more open-source tooling built on top of LND!
⛏️ ZEBEDEE announced the launch of Bitcoin Miner, a new Lightning-powered game from Fumb Games. They heard you liked stacking sats, so here’s a game where you can stack sats while stacking sats!
9️⃣ Start9 Labs added four new Lightning services to their self-hosted node solution Embassy: Lightning Terminal, LNDg, Balance of Satoshis, and Lightning Jet.
🏷️ Ben Arc showcased how to print Lightning faucets using LNURL, LNBits, and a simple label maker.
⛲ Fountain, the Lightning-powered podcasting app, released a new update supporting Lightning Address, user splits, activity notifications and skip controls. The UX improvements in the podcasting 2.0 space are a perfect example of accelerating adoption, there are now over 7,000 podcasts on the Lightning Network!
📥 Reacher.me is an e-mail forwarding service, built using Strike’s API, that requests a Lightning tip for the email to go through.
🎟️ The Bitcoin Company became a Lightning Service Provider and launched Lightning withdrawals. Now any third party merchant can sell gift cards or event tickets on their app.
🌍 Qala, the African program training Bitcoin and Lightning engineers, has identified their first cohort of trainees. Thirteen candidates were selected from more than 800 applicants to join the 3-month program, bullish!
🛒 ShopinBit, one of Europe's largest crypto-exclusive online shops, is now running their own LND node thanks to Voltage, allowing their users to pay via Lightning.
🔙 Satsback, the bitcoin rewards app, introduced automatic payouts with Lightning Address for their European users. Streaming sats continues to be a theme. They also connected an additional 2,800 online stores from Spain, Italy and Norway.
🌬️Breez published an article on the different ways web developers can integrate Lightning into their applications, like Lightning Address, WebLN, LNC, LSATs, and more. Lightning and the web were made for each other!
🔦 Blixt published a sneak peek of their upcoming macOS version of Blixt Wallet. Lightning from your desktop!
2️⃣1️⃣ Tuentyuno is an easy way to integrate Lightning payments into a website, built by René Aaron. Beautiful widgets, no fees, instant payouts.
📱 Robotechy is now selling Ben Arc’s LNPoS in their online store, providing merchants with a super inexpensive Lightning-powered Point of Sale device.
🐝 Alby enabled tipping on Github, adding up to their long list of supported websites, like Youtube, Medium, Reddit, Vimeo, Twitter, BitcoinTV, etc. And of course, they won a huge trophy for best pitch from a Lightning company during Bitcoin 2022, congratulations!
💸 Lightning Tip Bot now allows you to connect a self-custodied LND node or LNBits account to the popular Telegram bot for node management, expanding the options beyond custodial only.
🃏 CardCoins announced support for Lightning Address, explaining how it solves key business needs and improves UX for their customers.
🎲 LNBingo is a free-to-play Bingo game where the winners of each draw are paid instantly in Bitcoin over the Lightning Network. The app derives the winning numbers from the hash of the last confirmed block on the Bitcoin blockchain and the prizes are delivered using LNURL-Withdrawl.
🚘 Andy Schroder displayed his new Distributed Charge system at Bitcoin 2022, showing all the attendees how his Tesla could stream sats to a charging station in real-time.
♨️ Geyser.Fund added a host of new features to their crowdfunding platform, including rewards, perks, emoji badges, on-chain funding, and an Alby integration.
👊 Mash published a demo video showing how developers can integrate their Lightning wallet to their websites. With Mash, users can pay for value as they interact with contents.
🇬🇹 Osmo Wallet, a Guatemalan exchange, integrated the Lightning Network allowing its users to deposit and withdraw funds to their accounts quickly and cheaply.
Now's the Time to Build With Lightning ⚡️🍠
Builders in the Lightning ecosystem continue to build like the future depends on it! In April, the global Bitcoin community descended upon Miami for Bitcoin 2022, and, just like last year’s Bitcoin 2021 conference, Lightning was ubiquitous. The conference sold tickets over Lightning powered by OpenNode, vendors inside the conference sold refreshments over Lightning powered by Ibex Mercado, and Lightning developers were a mainstay on stage. Not only was Lightning ubiquitous, however, but the accelerating pace of adoption this newsletter has cataloged over the last year seems to have itself accelerated: new Lightning launch and fundraise announcements are happening faster and at a bigger scale than ever before!
Lightning Labs CEO Elizabeth Stark gave a keynote featuring the teenage founders of GenBitcoin, Ishaana Misra and Autumn Domingo. They asked about her vision for hyperbitcoinization, which led to an in-depth discussion into what “bitcoinizing the dollar” means with the new Taro protocol. They also discussed what makes Lightning different from the rest of the crypto ecosystem, with a focus on how the Lightning community prioritizes Number of People Go Up and growing bitcoin’s network effects, as opposed to building tokens on tokens on tokens with no real utility.
Elizabeth also spoke about Taro and bitcoinizing the dollar on Bloomberg TV, about the Future of Bitcoin and Lightning at Crypto Bahamas, and was named one of the top 100 most influential women in finance by Barron's!
Lightning Labs CTO Laolu Osuntokun gave a keynote on the new Taro protocol. After explaining that taro is a root vegetable with a taproot structure eaten across Africa, South America and Asia (where Lightning is being adopted at a rapid pace), and primarily produced in his home country of Nigeria, he walked the crowd through the protocol design and how Taro assets natively integrate with the Lightning Network. The audience at the high-signal Open Source Stage received Laolu’s expert tutelage in cutting-edge research at his customary Lightning speed!
Even those outside of the core Lightning community can see the rapid pace of growth and development, with world-renowned investors like Cathie Wood bullish on the prospects of what new developers can build with Lightning technology.
And for good reason, as the Lightning aspects of the conference convinced new developers to try out tools like Lightning Polar (created by Lightning Labs’s own Jamal James) for the first time. They were amazed at the frictionless experience, a testament to all the builders in the community!
A little over a month later, central bankers from 44 countries around the world traveled to El Salvador for a meeting of the Alliance for Financial Inclusion. Included in the three day agenda was a heavy dose of Bitcoin education, Lightning payment experiences, and testimony from residents of Bitcoin Beach in El Zonte. Probably nothing… 🚀
Bitcoin 2022 made it clear that Lightning adoption is progressing at a breakneck pace, that a developer friendly experience is the key to such adoption, and that the next generation of developers are ready to help take the network to the next level. Onwards! ⚡️📈👏
Lightning Labs News
Over the past quarter, we have been making consistent improvements to Terminal to better meet the needs of node operators. The Loop UI received a major upgrade, making it easier than ever to manage liquidity and ensure high reliability for received payments. Additional improvements include improved stability and persistence of the connection to an operator’s node, Lightning send and receive functionality, the ability to open and close channels, ability to set fees within channels, and a channel details menu. Plus, for more security and flexibility, we have created the option for node operators to provide read-only access to Terminal. We will continue to listen to user feedback to prioritize changes and new features. Please continue to reach out with any questions or feedback through our Slack channel.
For Lightning Loop, we recently increased the max swap size from 0.6 BTC to 1.2 BTC to meet the needs of users who want larger swaps. Further, in the latest client release, we’ve added experiments around pathfinding to increase reliability especially for larger Loop swaps.
We released lnd v0.14.3, a minor release focused on a series of bug fixes including: remote signer fixes, proper handling of 3rd party anchor sweeps, and a key payment consistency fix.
Finally, we also want to highlight our Taro documentation on the Lightning Labs Builder Guide as a great reference for any developers who want to dive deeper into the Taro protocol design, and our newest developer video walking through the Taro protocol. These documents should provide a more concise overview of the protocol, but the Taro BIPs can provide more detail if necessary.
We started an LND PR Review Club, where external developers can learn our codebase by performing PR reviews guided by frequent contributors.
The Review Club will happen every two weeks on Thursdays at 10am PT / 1pm ET / 5pm UTC in the lnd slack channel #review-club. We welcome suggestions for PRs and volunteers for hosting sessions.
CEO Elizabeth Stark appeared on a panel with Meltem Demirors at Crypto Bahamas where they explained the transformative role the Lightning Network and Bitcoin play in facilitating cross-border payments, expanding financial inclusion in emerging markets and creating interoperability in ways never before seen in the history of money. She also spoke on a panel on human rights and financial freedom with Lyn Alden, Dario Sneidermanis, and Hong Fang at the Oslo Freedom Forum to answer the question Can Bitcoin Reach a Billion People? Spoiler alert: yes!
In addition to his Bitcoin 2022 keynote, CTO Olaoluwa Osuntokun also participated in a panel on the tradeoffs of Lightning implementations, gave an interview to Coindesk TV on the growth of the Lightning Network and the launch of Taro, and discussed Taro and the need for digital assets on Bitcoin on Tales from the Crypt with Marty Bent and on Stephan Livera Podcast.
Director of BD Ryan Gentry joined a panel on Lightning Service Providers and Liquidity at the Bitcoin 2022 Conference, and had his blog post on Taro read aloud by Guy Swann on Bitcoin Audible.
Product Growth Lead Michael Levin was interviewed by Kevin Rooke on the dual adoption curves of Bitcoin, Lightning Labs and its products, the importance of the Plebnet community and the future of the Lightning Network and Taro.
Developer Advocate Hannah Rosenberg talked about the future of Lightning development on a panel at Bitcoin 2022.
Senior Lightning Infrastructure Engineer Oliver Gugger discussed Defining The Standards of Taproot & Multisig on a panel at Bitcoin 2022, and presented the current state and next steps for Taproot on Lightning at Advancing Bitcoin
Engineer Elle Mouton compared different static invoice standards (LNURL, Offers and AMP) at Advancing Bitcoin, and spoke about simplifying the Lightning Network in an interview for the Connect the World podcast.
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Thanks for reading!