The Bitcoin Renaissance Is in Full Swing: How Lightning Will Connect Everything Off-Chain 🌐⛓️

Welcome to the latest edition of the Lightning Lab 🧪, a newsletter filled with Lightning Network updates, community coverage, and, of course, memes! 2024 has started with a bang with the bitcoin ETF approval, Taproot Assets launches, surging interest in AI and LN, and a ton of building on bitcoin. With all the recent momentum, there’s never been a better time to build on bitcoin!

The Bitcoin Renaissance Is in Full Swing 💥

As we discussed in Entering the Bitcoin Renaissance, our last edition, Lightning Labs CEO and Co-Founder Elizabeth Stark told The Block, “a major narrative of the next cycle will be the bitcoin renaissance, and it has already begun in full swing.” Only a few months later, and that is proving to be quite prescient!

Electric Capital’s annual Crypto Developer Report included this slide that highlighted what we’ve been feeling: developer interest in scaling bitcoin is at all-time highs! It’s easy to understand why. The bitcoin ETFs are live, the halving is only a couple of months away, and it seems that the design space for building on bitcoin has never been broader. The bitcoin renaissance is most definitely here. We at Lightning Labs are loving the surge in developer excitement because in general new talent and new ideas are good for bitcoin, but also specifically all of these new off-chain ideas are great for the continued growth of the Lightning Network, bitcoin’s biggest L2!

The growing developer community is excited about a few specific new categories of off-chain bitcoin protocols:

1. New federation-based solutions like fedimints and cashu for Chaumian e-cash, and spiderchains for novel risk management of bridged funds

2. Leveraging zero knowledge proofs to build ZK-Rollups, a new type of sidechain that leverages the bitcoin blockchain for data availability and double spend protection for its own natively issued assets

3. Designing new off-chain bridging solutions with BitVM, a new computing paradigm to express Turing-complete bitcoin contracts, and investigating covenants as a way to boost UX and security improvements to all off-chain protocols

Federation-based solutions like fedimints, cashu, and spiderchains are all similar in that some group of off-chain operators receive bitcoin payments on-chain, and then mint new tokens backed (to varying degrees) by those new bitcoin deposits off-chain. This means that securely moving funds into and out of these solutions requires waiting an hour for multiple bitcoin block confirmations. For this reason, all of the federation-based solutions are building ways to connect to the Lightning Network so their users can send and receive instant payments to the many wallets, exchanges, and merchants already connected to Lightning. This makes Lightning the interoperability layer between these new systems! These new off-chain environments will only serve to expand the network effects of Lightning as a global routing protocol, bringing more users and more volume and keeping the flywheel spinning.

Lightning Labs CTO Laolu Osuntokun presented his ideas regarding bringing ZK proofs to bitcoin last year at Starkware Sessions, so we are thrilled to see developer momentum around the idea. In general, zero knowledge proofs allow for the compression of large datasets into compact, easily verifiable proofs, which will enable Lightning developers to bring instant, secure synchronization times to mobile users to dramatically improve UX. Taproot Assets developers can leverage the same techniques to make on-chain transfers more user-friendly by decreasing the on-chain proof sizes. Further, a new zero knowledge proof verifying op code could be included in the Taproot Assets Virtual Machine without a bitcoin soft fork to support next generation application building. 👀 

BitVM, originally proposed by researcher Robin Linus, has captured the attention of off-chain bitcoin developers because of its potential to enable a new trust model for off-chain protocols: instead of needing to trust the majority of a federation to be honest in order to withdraw your coins, users may only need to trust one member to honest. This would be a huge improvement if true. On Lightning, of course, users running their own nodes and holding their own keys don’t need to trust a counterparty, so BitVM would be helping other off-chain protocols attempt to approach Lightning’s level of trust-minimization. Taproot Assets developers could make use of new BitVM techniques in building trust-minimized asset bridges from non-bitcoin blockchains back to Taproot Assets, or in productizing the Pocket Universe concept, a new type of solution for non-custodial, off-chain exchange development with native Lightning integration. 

Covenants, unlike BitVM, would require the bitcoin community to agree to an upgrade via soft fork that would empower developers to preconfigure the future conditions under which specific coins can be spent. Developers are currently discussing seven different proposals, with a focus on applications like vaults for more programmable cold storage, and also on enabling more off-chain protocols generally by decreasing end user interactivity requirements. As a specific example, certain covenant proposals would allow Lightning developers to build safer and more scalable Channel Factories (compared to what’s possible today) as a self-custodied off-chain option for users, in addition to making the protocol as a whole more developer-friendly. Taproot Assets developers will similarly be able to leverage covenants capabilities to build out Pocket Universes, and also to trustlessly bridge bitcoin itself into Taproot Assets as a 1:1 backed asset.

Importantly, building bitcoin DeFi (or finance tools that inherit as much of bitcoin’s trust minimization as possible) is a major motivation of these new off-chain projects, and DeFi will require the stablecoins issued on Taproot Assets in order to thrive, so the timing for these new projects couldn’t be better. Lightning will be the interoperable glue that will connect them all! 

In 2024, the vibe is about everything coming back to bitcoin, as Lightning Labs CEO Elizabeth Stark noted. To that end, we are so excited that the bitcoin developer community is growing and focusing on expanding bitcoin’s off-chain capabilities. Lightning Labs and the open source community have leveraged the 2021 Taproot upgrade to build a scalable asset issuance protocol in Taproot Assets that will bring stablecoins to the Lightning Network, and to bring Taproot channels to node operators for more cost effective and private channel and liquidity management. Imagine what will be built with new federation-based solutions, zero knowledge proofs, BitVM, and (possibly) covenants!  

News & Updates

Lightning Launches

Braiins Mining introduced Lightning payouts. Their miners can now instantly receive mining rewards with no minimums or fees. The LN <> mining convergence is happening!

LN Markets integrated a DLC marketplace and completed a $3M seed round led by Ego Death Capital. A DLC is a native “smart contract” built on Bitcoin which enables the delivery of a payoff depending only on the publication of a price by an oracle.

Strike launched Strike Africa, expanding their full suite of Bitcoin and Lightning services into Gabon, Ivory Coast, Malawi, Nigeria, South Africa, Uganda, and Zambia.

Athena Bitcoin announced that they’re rolling out Lightning support to hundreds of their ATMs.

Royllo, a search engine & explorer for Taproot assets, is now running on mainnet. They recently released version 0.1.0, in which they store and display Taproot Assets metadata.

Nostr Assets launched their mainnet Taproot Assets release, allowing users to transfer bitcoin and Taproot Assets through Nostr. They’re also partnering with Voltage to enable their next phase of growth with non-custodial solutions.

Tiramisu Wallet, a wallet for the Taproot Assets protocol, went live on mainnet enabling users to mint, send, and receive assets on bitcoin.

Lightning Stats

• 🌐 LN Markets announced hitting $2B in cumulative trading volume since inception, just 3 months after exceeding the $1B dollar mark.

• 🎯 Slice, a browser extension that pays users for viewing ads, reached 600k downloads. 80% of their payouts are processed over the Lightning Network.

• 📊  Wallet of Satoshi has officially made 15M Lightning transactions since inception. Here’s to the next 15M!

• 🌴 Bitcoin Jungle enabled 200+ stores in Costa Rica to receive bitcoin payments through BTCPayserver. They also outlined how they are using Lightning Loop to handle on-chain transactions.

• 💼 Nostr Assets received more than 177 BTC in Lightning deposits during the first month of mainnet operations for their Taproot Assets exchange.

• ♒ River announced that by the end of January they had cumulatively routed 10.1k BTC ($455M) across 3.8M total Lightning transactions, averaging 268k sats ($109) per transaction.

• 🎰 ZBD shared Delphi’s November 2023 report titled the "Bitcoin Gaming & The Power Of Nano-Transactions", which revealed many impressive statistics highlighted by Ludo Zenith, a game with 2M+ downloads, experiencing an 80% surge in Average Revenue Per Daily Active User (ARPDAU) post-ZBD API integration.

Lightning Ecosystem

• ⚡ Voltage released a huge update to their bitcoin development platform, redesigning their UI, allowing node operators to add team members with specific permissions, and updating their pricing models.

• ✅ Amjad Masad, CEO of Replit, started a poll asking if they should replace Replit Cycles, the currency that powers their bounties, for Bitcoin and Lightning. 86.8% of the 4,136 voters on X (formerly Twitter) responded “Yes”. 

• 📝 Spirit of Satoshi released a Bitcoin and AI industry report that highlighted both their tools for Lightning-enabled crowdsourced LLMs and the benefits of an L402 integration in facilitating machine-to-machine economic activities.

• 🌋 Blink announced a partnership with Distribuidora Morazán, supplier of 40,000 merchants in El Salvador. Additionally, they built a plugin for BTCPay Server allowing users to connect their Blink account to BTCPay Server, sidestepping the need for a Lightning Node.

• 📱 River launched River Link, allowing users to send bitcoin vouchers that can be claimed in any bitcoin or Lightning wallet. They also released their app on the Google Play Store.

• 🕹️ ZEBEDEE announced a deal with Fumb Games to integrate bitcoin rewards in mobile game SpaceY, and announced the return of ZBD Infuse, a product that lets game developers easily add Lightning functionality to their games, with 1047 games for bitcoin rewards in Splitgate.

• 🎟️ Bipa released “Vale-Bitcoin”, a LNURL-withdrawal integration that enables users to gift sats to their friends, who can claim them in any Lightning wallet. Recently, they proposed and implemented an extension for LNURL that will allow for sender and receiver to negotiate a conversion rate on any currency, mainly targeting remittances.

• 📲 Pouch.ph partnered with One Coop Tech to roll out CoopPay, a mobile wallet app that allows cooperatives to send and receive Philippine peso and bitcoin payments via the Lightning Network.

• 🌈 Prism is a non-custodial Nostr Zap app and Discord Zap Bot, built on top of Nostr Wallet Connect. These apps can make payments to multiple parties in a single click, leveraging the Lightning Network and Nostr.

• 👁️‍🗨️ Noones, a P2P marketplace and messenger, integrated the Lightning Network. Payments are available worldwide, with deposits being gradually rolled out for their customers.

• 🔫 Musqet, a UK-based merchant solution for accepting Lightning payments, launched support for their first customer in Brighton.

• ⛏️ Titan Mining announced their Lightning Network integration, which allows miners to receive block rewards every ten minutes with no minimum payout.

• 🏆 Legends of Lightning Vol. 2 by Bolt.Fun selected three winners among the 69 submitted projects to their hackathon: Bitcoin Connect, a library that enables users to connect their wallet to lightning-powered websites, USDp, a DLC-based stablecoin, and Resolvr, an adjudication and escrow for FOSS development bounties.

• 🇧🇷 SatsHack, a hackathon organized by Vinteum during Satsconf in Brazil, had 65+ hackers building 14 projects. The winner was Minimaxis, an LLM for bitcoin miniscript coding assistance.

• 🌍 The Build for Africa hackathon, organized by ₿trust Builders, selected three winners from its 38 submitted projects: BitPension, a multisig retirement project, Splice, a Taproot Assets remittances project, and Stealth Money, a bitcoin onramp.

• 🔧 PlebLab is running the Top Builder Program, a 8-week educational program for bitcoin hackers. 30 projects were mentored and accelerated throughout the program, and the 6 finalists will be pitching in Austin, Texas, on Startup Day in March.have been accelerated throughout the program thus far, and the 6 finalists will be pitching in Austin, Texas, on Startup Day in March.

• 🥾 Africa Free Routing is hosting a Bitcoin Lightning Development Bootcamp in Lagos, Nigeria. The 5-day deep dive with hands-on workshops and Q&A sessions will be taught by engineers at Bitnob and Ibex.

• 🛠️ BitBlockBoom will host a hackathon on April 12 for developers building apps integrating both Lightning and Nostr.

• 📄 Anita Posch summarized her testing of self-custodial Lightning wallets under challenging conditions in Zimbabwe's rural areas in a great review post.

• 🔦 Flash Protocol allows you to mint Taproot Assets collectibles with Lightning Network payments.

• 🗝️ OneKey integrated Nostr and WebLN support into their hardware and software wallets, and announced a partnership with Flash Protocol for Taproot Assets support. Their team also posted a great summary of the L402 ecosystem.

• 🤳 UXUY is a multi-chain wallet incubated by Binance Labs, that recently integrated the Lightning Network and Taproot Assets. They’re also running a Taproot Assets Universe to help users explore what assets have been issued.

• 📰 Mash announced that they’ve partnered with CryptoSlate, so readers can add emojis/stickers and engage with content using the Lightning Network. Additionally, they released Reward Pages, enabling publishers and creators to incentivize engagement by rewarding their audience with bitcoin withdrawals over Lightning, and Mash Premium, an orange checkmark for $15.

• 🌊 Primal, one of the most popular Nostr clients, integrated a built-in Lightning wallet, powered by Strike Black.

• 🐝 Alby is now available for Firefox on mobile. Users can use the extension while browsing on their phones. They also added an LND Onboarding Tool to their extension, incentivizing self-custodial usage of their wallet.

• 📚 Jippi is a new interactive educational app for beginners to earn and learn about bitcoin with others. The bitcoin rewards are offered through a partnership with Joltz.

• 🦁 Bitfinex released a Lightning Channel Service in partnership with Blocktank, allowing users to acquire inbound liquidity from Blocktank’s Lightning Service Provider (LSP) nodes.

• 🔐 Cipherchat is a new app for encrypted private messaging using the Lightning Network via the Lightning Node Connect (LNC) protocol.

• 💬 Unleashed Chat by Coinkite reached 1500 users paying bitcoin to use their AI LLMs with file upload context embedding, nostr embedded, and more.

• 🎟️ Flockstr is an alternative to Meetup or Facebook Events built on Nostr with Lightning Zaps integration for rewards and ticketing.

• 🧼 Soapbox, a Fediverse client that supports decentralized social networks like Mastodon, Pleroma, PeerTube, Threads, has integrated Nostr and Lightning Zaps for permissionless payments.

• 🦇 B.A.T., the Bitcoin Auto Teller, is a portable Lightning ATM that accepts both fiat coins and bills, uses a 7" color screen display, and has an NFC reader for instant withdrawals via an LNURL, Lightning Address, or Bolt Card.

• 🔧 NostrEggs is a toolkit that integrates the nostr protocol with the Lightning Network, enabling private, efficient micro-transactions for API services.

• 🔄 Calle, the LNBits and Cashu developer, implemented a proof of concept of Robin Linus’s Bitstream protocol for atomic swaps between files and Lightning payments in Cashu.

• 🌩️ Blixt Wallet has implemented new features like simple Taproot channels, 0-conf channel support in their Dunder LSP, which will provide smoother UX for user onboarding, and Lightning Box support for Android, enabling users to receive Lightning Address payments directly on their phones.

• ☕ Tiramisu Wallet proposed a standardized format for Taproot Assets metadata, which could allow for compatibility between multiple Taproot Assets apps.

• 💰 Satsback is now live in the USA, their 16th country. More than 500 US-based stores are already giving sats back to shoppers through their platform. Additionally, they posted a demo for satsback in physical stores, using the Bitcoinize POS.

• 🛒 Neutronpay released their Point of Sale feature. The feature allows linking multiple devices to the same account for transactions across stores or allowing staff to accept payments using their own devices. They’re also live in Thailand now. 

• 🥤 Vancouver Lightning Hackday hackers built some innovative projects, one of them being a vintage vending machine running LND and LNbits, where each button conceals an NFC card with an LNURL unique to the corresponding soda.

• 💼 CityPay.io, a crypto payments processor, has integrated with the Lightning Network due to high customer demand for their enterprise payment solution.

• 🍊 Orange Pill App, the geosocial networking app for bitcoiners, integrated the Lightning Network for payment of their subscription.

• 🎮 Beamable, a company enabling Unity & Unreal developers to easily add social, commerce, and content management features to their games, announced the launch of a starter kit for adding secure bitcoin transactions to games, in partnership with ZBD.

• 📧  AcceptLN is a new service that allows users to send Lightning payments to any e-mail address.

• 📚 PlebDevs released a backend course teaching backend development from scratch and how to build a simple Lightning wallet backend.

• 🖨️ BTCPayServer is implementing a plugin that will allow any Lightning POS to print Lightning vouchers.

• ⛲ Fountain released version 1.0 of their podcasting app, with a big design and user experience upgrade, along with new social features. They also introduced playlists in a partnership with ZBD where you can be rewarded by listeners from your playlist.

• 🍲 Hifumi is a new Uber Eats equivalent from El Salvador that accepts Lightning payments.

• ⚡ Zeus shipped v0.8.1 of their mobile Lightning wallet with a standalone point of sale, nostr contacts, contact sharing via QR, persistent LND, and more.

• ⚖️ Balance of Satoshis v17.6.0, a popular tool for Lightning node management, has the first LSPS (API specifications for Lightning Service Providers) Channel Request API live on mainnet, allowing node runners to get inbound channels and offer channel opens.

• 🌋 Node Nation is a new pilot educational program by Decouvre Bitcoin with the support of the Salvadorean government that will teach students how to set up, operate, maintain and manage liquidity on a Lightning node.

• 🌍 Kotany Pay, an on-ramp/off-ramp service for remittances to Africa, announced a partnership with Machankura to offer Lightning payments and Azteco vouchers for their users.

• 📧 Hermes is a Lightning Address server that uses Fedimint e-cash on the backend.

• 🥚 Egge worked on a Proof of Concept Mint/LNURL server that holds payments until the Cashu wallet claims it.

• 💱 Bringin, a Lightning-enabled tool to spend and sell bitcoin and get Euros into a bank account or a virtual debit card, has publicly launched their app..

• 🟣 Damus, one of the pioneering Nostr clients, released Purple, a premium tier for project supporters. Users can pay for a membership through Lightning and access exclusive features like automatic translations of posts and more.

• 📩  SatsContact provides users with a Lightning Address that converts sats received over Lightning into Cashu e-cash tokens in real-time, and notifies the user via a Telegram message.

• 🇨🇭 Mt Pelerin partnered with fellow Swiss company Swiss Bitcoin Pay to provide their merchants fiat conversions in 12 different currencies.

• 👻 Amboss launched their risk management platform for Lightning nodes, Reflex. They also introduced Ghost Address, enabling Lightning Address payments to self-custodial nodes through a fake node ID intercepted by the real receiver.

• ☂️ Umbrel introduced UmbrelOS 1.0, and the new, upgraded Umbrel Home. They also released a new version of their Lightning node app, adding a host of requested user features.

• 🛍️ Zaprite just launched a new WooCommerce integration, allowing merchants to use Zaprite Checkout to collect bitcoin on-chain and Lightning payments for their ecommerce stores, directly into self-custody. 

• 📱 SatsMobi is a telegram bot with a built-in Lightning Point of Sale applet.

• 💵 Minibits, a Cashu wallet, can now receive Lightning zaps as e-cash.

• 📨 Cashu Addresses allow users to receive Lightning payments that are then sent to a Cashu mint of choice and received as e-cash.

• 𓅦 npub.cash is a new e-cash-powered Lightning Address server that automatically onboards anyone with a Nostr public key.

• 🎳 Strike is officially live in Puerto Rico with their full suite of services.

• #️⃣ NiceHash, the cloud mining marketplace, now supports LNURL payments for more user-friendly Lightning withdrawals.

• 🏪 Azteco bitcoin vouchers are now available in Italy at over 5,000 MrPay stores and kiosks. In South Africa, users can now use EasyPay and aCoin vouchers to buy bitcoin.

• ⚙️  LN+ integrated Speed, a Stripe-like platform focused on bitcoin, as a payment processor for Lightning payments.

• 💳 Swiss Bitcoin Pay built a new Bolt Card open-source app that lets you turn any Lightning POS provider invoice into an NFC-payable invoice.

How Lightning Will Connect the AI Economy 🤖

Joe Lonsdale, co-founder of Palantir, recently told CNBC that AI agents will be an important future buyer of bitcoin, as they’ll be using it to coordinate. And Lightspark CEO David Marcus added that of course these AI agents will be settling over Lightning. It seems that the narrative we wrote about last August about how AI agents will use Lightning is catching on!

Especially now that AI costs are soaring, it is becoming clear that the Lightning Network will connect the AI economy as its new economic models demand more flexible payment structures. It is no surprise that the market is waking up to this possibility, as the Lightning developer ecosystem has been busy shipping code to support AI agents. 

OpenAgents CEO Christopher David recently shipped an end-to-end demonstration of an AI agent purchasing data over the Lightning Network. This demo shows off the power of the Lightning Network so well:

1. The AI agent accessed Lightning via Alby wallet, a popular browser extension

2. The server itself charged for the data sale using an L402 proxy built by Sulu Solutions, an API monetization startup

3. The AI agent not only paid Sulu Solutions for the data, but also paid the decentralized GPUTopia network of Lightning-powered AI providers for inferencing services

This type of permissionless, frictionless economic activity between autonomous agents is exactly what the Lightning Network can do better than any other payments network. Four different companies running software built by different entities running on different continents, some managed by humans and some by robots, all connecting over the common programmable payments layer of the Lightning Network. Amazing! 

Further, fewsats released the alpha version of their platform where developers can upload, share, and monetize their code recipes (small, self-contained programs tailored for specific functions via the L402 protocol). And CASCDR, a very cool project in the Legends of Lightning hackathon, showed off how L402 Paid API services like AI vision, text-to-image generation, and more can be discovered, integrated into a workflow, and combined into a whole application greater than the sum of its parts. We love to see it!

The momentum in this ecosystem is palpable, and the timing seems right for the convergence of these two world-changing technologies. Follow along as the Lightning and L402 developer communities continue to release new tools and onboard the AI economy to bitcoin and Lightning.

Lightning Labs News

Product

Earlier this month, we released Taproot Assets v0.3.3-alpha, which reduces resource requirements for public Universe servers and makes sending and receiving of assets more robust, amongst other improvements based on developer community feedback. We’ve been incredibly impressed with all of the activity from the Taproot Assets developer community who have issued over 113,000 distinct mints (where each mint can produce a very large number of assets) with the default Universe server thus far. 

Additionally, we released LND 0.17.4, which included fixes for more efficient memory usage when using polling mode for bitcoind, sync improvements for pruned nodes, and channel open hangs. As always, we recommend upgrading to the latest version of LND to ensure the most performant operations. 

For Lightning Loop, a service that allows users to replenish inbound liquidity (Loop Out) or outbound liquidity (Loop In) on the Lightning Network, we released v0.27.0, which introduces batchable Loop Outs. Users making many Loop Outs in a short period of time will now see their individual transactions aggregated into a single output, significantly reducing their chain fee costs.

Finally, Lightning Terminal now has batch channel open functionality, which allows for node operators to save on-chain fees when allocating capital to open Lightning channels. Follow our ongoing Youtube series Navigating Your Node with Terminal to learn more!

Media

• CEO Elizabeth Stark spoke with Lunaticoin at Labitconf in Buenos Aires about the Bitcoin Renaissance, including excitement about building on bitcoin, multi-asset Lightning, and AI agents using Lightning to transact with bitcoin.

• Head of Business Development Ryan Gentry explored what will 2024 bring for bitcoin on the Ark Invest and Bitcoin Park podcast with Parker Lewis, Lyn Alden, Preston Pysh, and Lucas Nuzzi. He also presented on the state of Lightning and the catalysts for the next wave of adoption at Satsconf in São Paulo.

• Senior Infrastructure Engineer Oliver Gugger gave a talk at Adopting Bitcoin Cape Town on the basics of Taproot Assets and how it’s making bitcoin a multi-asset network. He also joined the Optech Newsletter Recap Podcast talking about his Lightning protocol work.

• Security Engineer Eugene Siegel talked about the block stalling bug in Bitcoin Core, which he responsibly disclosed three years ago, on the Optech Newsletter Recap Podcast.

Hiring

Are you an engineer manager with working knowledge of Bitcoin and experience managing remote teams across several time zones? We are hiring for a Senior Engineering Manager!

Other roles include: 

Lightning Infrastructure Engineer, Assets Protocol Engineer, Lightning Protocol Engineer

Join us in making magic internet money a reality! 🧙‍♂️

Want to get involved? Join the LND Developer Community on Slack.

Meams