Welcome to the April edition of the Lightning Lab, a newsletter filled with Lightning Network updates, community coverage, and, of course, memes! In this issue, we focus on new use cases gaining traction in the Lightning world, and how bitcoin the network makes bitcoin the asset much more than just a Store of Value™️.
We are now hosting our Clubhouse room on a bi-weekly cadence, and the next one is on Wednesday, April 14 at 4pm ET. And to broaden access to developers, we are also hosting Developer Office Hours on our new Lightning Lab Discord. Join us!
The Sats Are Streaming
We recently launched Lightning Bulb 💡, a list of open research questions and experimental ideas for the Lightning developer community to build on bitcoin. We hope these questions will inspire the community and help ignite new projects and use cases. Here are a few of our favorite ideas:
Social Sats: Streaming payments for content creators
Podcasting is the first form of media to adopt streaming payments over Lightning (see Sphinx.Chat and Breez), but they most certainly won’t be the last. Streamers on Twitch, Youtube, and other creator-focused platforms will soon be accepting streaming payments directly from their audience over the Lightning Network, and developers will build the tools! We suggest static QR codes, ability for streamers to get notified when a payment has been received, and to focus on enabling audience engagement. Who’s ready to stream sats to their favorite Fornite gamer?
Storing Rewards: Distributed storage and retrieval
Every Lightning node operator wants to earn more sats, and most nodes have excess storage capacity. What if node operators could earn sats for leasing out their storage? We’re picturing a simple challenge and response protocol allowing users to store a file with a node, and make periodic payments each time the node successfully proves they have the file in local storage. Imagine earning sats from that 10 TB SSD that your grandparents got you because all they know about your bitcoin obsession is that you’re “into computers.”
Keysend Services: Pay-per-use Lightning API Calls
Lightning enables developers to charge per API call to their server, either for DoS resistance, rate limiting, or as a way to monetize their work. Keysend services are those where both the API request and response are made with Lightning push payments. We’re picturing a bot in a chat group that will query the StatMuse API and return sports or finance stats, in exchange for some sats. Stats for sats!
Check out the full Lightning Bulb list of open questions and ideas. If something sparks your imagination, let us know!
News & Updates
Streaming payments took center stage this month in the Lightning ecosystem. Between Paul Itoi of Sphinx Chat’s excellent podcast with Marty Bent, and Breez embedding a podcast player into their non-custodial, mobile Lightning wallet, Twitter was filled with proof streaming payments are here to stay.
Don’t just take our word for it, see for yourself!
And importantly, streaming payments aren’t just for podcasts. We’re really excited to see sats being streamed for data downloads, storage, and other web-related applications.
Aker, a 180-year-old Norwegian conglomerate, launched Seetee AS, a new company dedicated to investing in bitcoin projects and companies. In his letter to shareholders, Kjell Inge Roekke, chairman and majority owner of Aker, credited our CEO, Elizabeth Stark, for producing content that helped him understand bitcoin, and demonstrated an advanced understanding of the Lightning Network:
“Does a global distributed network of bilateral payment channels sound impossible? In fact, that’s how spot foreign exchange works. Aker is the largest investor in Abelee, a non-bank liquidity provider in the foreign exchange market.”
“I’m fascinated by the prospect of bitcoin Lightning wallets that may enable instant credit via micropayments without the need to offer personal information that my counterpart can monetise without approval or compensation.”
Cryptograffiti is debuting a new way for DJs and music producers to earn from their fans on Friday April 9th, livestreaming a DJ set from the US Mint in San Francisco. Viewers can tip over Lightning, and they’re split 10% to the DJ and 90% to the track producer. Programmable internet money will lead to an explosion of creativity. 🤯
In other news:
🍾 Bottlepay raised a $15M seed round from a group of investors including Alan Howard and NYDIG, River Financial announced a $12M Series A fundraise led by Goldcrest, and NeutronPay raised a seed round led by BitcoinVN. We expect many more announcements to come from the Lightning community!
🌕 Moon relaunched their Lightning-based online payment option with new support from Visa’s Fintech Fast Track program. Their browser extension allows anybody to spend bitcoin at any online merchant that accepts Visa payments by having users fund a prepaid debit card over Lightning.
🏝 Strike has taken their mobile payments app international, setting up shop in El Salvador as their first non-US country thanks in large part to the Bitcoin Beach community.
🌎 Bitrefill blew us away by revealing customers from 105 different countries have purchased goods from them over the Lightning Network in just Q1 of this year. This global, grassroots payments revolution is growing fast!
🎧 Lightning Store has written a great series of guides for new Lightning users interested in streaming audio via Breez or Sphinx.Chat from their own nodes. Multiple DJs are already onboard, fully demonstrating that the value for value model is really striking a chord.
🎮 Zebedee released a Go SDK for game developers looking to embed bitcoin payments into their games, and easy-to-integrate bots for Telegram and Discord that allow users of their wallet to send sats with a simple text command. GG!
⚡️ Wallet of Satoshi has officially reached 1M Lightning transactions from their user-friendly, custodial wallet. That’s 400 blocks worth of bitcoin transactions spared from on-chain fees and settlement times, here’s to the next million!
⏫ Azteco, the bitcoin voucher company, has officially upgraded to the Lightning Network! Their users purchase vouchers for small amounts of bitcoin at retail locations, and then redeem them online for bitcoin sent directly to their wallet.
💸 The Biz, a new podcast series from John Carvahlo, launched their first episodes with a new Lightning-based monetization model called a crowdwall. They will set a funding goal for each episode and when the goal is reached by early listeners paying over Lightning, the content is made freely available to all.
🎨 Scarce.City hosted four Lightning-based auctions: a backlit Bear Whale portrait from Matt Habel that sold for 8M sats ($4.6k), the original United Nodes of Bitcoin bill from cryptograffiti that sold for 100M sats ($58k), a Bitcoin White Paper piece from Cypherpunk Now that sold for 31M sats ($18k), and a Dollars Assange work from Pascal Boyart that sold for 100M sats ($58k).
🔌 Voltage announced support for BTCPayServer alongside their hosted Lightning node solution, and published a great case study from Thndr Games, the popular Lightning game developer, on the experience of building on Voltage.
📝 Fulgur Ventures published an overview of the different Lightning Network implementations that included usage and development statistics, roadmaps, build instructions, and overall ecosystem outlooks.
📜 Lyn Alden released a report on bitcoin’s network effects with a section dedicated to the Lightning Network, with the highlight quote being “in many ways, the network effect applies to the Lightning layer more than even the base layer of bitcoin itself.” 🔥
📈 Coindesk wrote an update on the Lightning Network’s growth, noting that the active public node count has more than doubled over the past year to 10,000. We believe users running their own nodes, the explosion of new apps and use cases, and more on-ramps have played a significant role in growing the network.
💛 Fold is exploring letting users pledge their funds to Lightning liquidity in return for a yield on the sats back they’ve earned. Bitcoin as a productive asset is already here, it’s just not evenly distributed yet.
🦁 Bitcoin Namibia is already processing 80% of their bitcoin volume over Lightning instead of on-chain, after only enabling deposits and withdrawals at the start of this year!
🌮 LNBits, the open sourced Lightning accounts and extensions system, released a cool new feature that allows users to print out QR codes and sell goods without any electronic devices. This would let a busy street vendor in a remote area sell food without needing cash or keys on hand. Bitcoin for all!
Bitcoin: Not Just a Digital Rock
This month, we’re publishing an interview with our CEO Elizabeth Stark about her vision for the future of bitcoin. Hint: it expands far beyond the store of value use case.
What do you foresee as the future of Lightning over the next decade?
Most users won't even know they're using bitcoin and Lightning, much like users of the internet don't know they're using TCP/IP. People will be able to natively and seamlessly send money in any application on the internet, similar to how they can send photos today. Bitcoin can be the protocol that underpins transacting on the internet, from cross-border payments to payments embedded in chat apps to gaming to supporting artists and creators.
What’s your take on how bitcoin will evolve over this same time horizon?
Bitcoin is many things to many people and that's okay. But this idea that it's merely a digital rock fails to tap into the very nature of what bitcoin can do. Bitcoin is programmable money, and Lightning can help scale it to billions of people across the world. Bitcoin is a protocol for value, through which internet-native transactions can occur. We hear a lot about "bitcoin the asset" lately, but "bitcoin the network" is just getting started in terms of its massive potential to be the native protocol for value on the internet. And Lightning will power this by enabling developers to build bitcoin-native applications with instant, low fee transactions.
Strike Global is an early example of what I've been excited about for years: with the ability to send bitcoin over Lightning instantly, it can become the backbone for so many transactions globally, with instant speeds and near zero fees. Bitcoin can be the interoperable protocol for value that connects all other currencies and assets.
Bitcoin's network effects mean that as each new user joins the network, its value increases exponentially, aka Metcalfe’s Law.
Meltem Demirors @Melt_Dembitcoin is not digital gold. it's so much bigger than that. please let's stop anchoring bitcoin to gold. the market cap of bitcoin will far exceed that of gold, because one is a shiny rock that sits in a vault and the other is magical internet money.
I'm particularly bullish on emerging markets and the potential for Lightning to have a huge impact with instant, low fee bitcoin transactions. We've seen great experiments take off like Bitcoin Beach, a community in El Salvador, along with applications like Stak where users perform tasks to earn BTC on LN. Billions of people don't have access to credit cards today, and bitcoin over Lightning can play a major role in increasing access to digital payments. We'll see even greater connectivity globally with more equal access to a monetary system much like how the internet provided greater access to information and educational resources. Bitcoin will do in 10 years what the internet did for information—make it more accessible and democratized.
What do you think will surprise people most about bitcoin and Lightning?
Most of the biggest use cases in the future will be things that would sound insane to us today, kind of like how an encyclopedia that anyone can edit would have sounded crazy to people in the pre-Wikipedia era.
Machines will pay machines, natively, instantly. Teslas will pay for charging with Lightning! (Looking at you Elon, as it's already possible today.)
How would you describe the state of the Lightning community?
Right now the Lightning video game community is blowing up, Lightning art auctions are taking off, musicians and podcasters are adopting Lightning for native payments, we're seeing chat apps be developed on top of Lightning, user rewards in apps like Fold, and so much more. There's an explosion of creativity, and this is just a small fraction of the use cases we'll see in 10 years from now.
Lightning Labs News
In our latest product update post, we covered improved graph propagation in lnd, sidecar channels in Lightning Pool, clearer Loop fees, and the ability to run Lightning Terminal remotely. Sidecar channels, a way to allow services to onboard users to Lightning without requiring any upfront capital, were a big hit!
In the media, Elizabeth Stark joined OKCoin CEO Hong Fang and COO Jason Lau for an AMA discussing OKCoin’s recent Lightning integration. She hosted Lyn Alden and Nik Bhatia on Clubhouse for a discussion about bitcoin’s network effects, and was interviewed by Lyn Alden on RealVision about the next generation of financial infrastructure, which was especially well received!
Alex Bosworth presented at the Lightning Hacksprint on routing node optimization as the first service amongst many in the new decentralized bitcoin economy.
Ryan Gentry appeared on the Investor’s Podcast with Preston Pysh to discuss the Lightning Network and joined Jack Mallers from Strike, Valentine Wallace from Square, and the MIT Bitcoin Club on Twitter Spaces to talk about the newest developments in Lightning.
Want to have a hand in making bitcoin more than a digital rock? We are hiring for a designer who can work with us on creating compelling visual design and UIs for our products.
Other roles include:
Join us in making magical internet money a reality! 🧙♂️
Thanks for reading… share with your friends, and scan this QR code from your Lightning wallet to stack a few sats.💰