Welcome to the September edition of the Lightning Lab, a newsletter filled with Lightning Network updates, community coverage, and, of course, memes! In this issue, we discuss the massive amount of adoption that’s taken place this summer — from El Salvador to Starbucks to Twitter — all thanks to our community of Lightning startups and developers. Number of People Go Up! 📈
The Summer of Lightning Adoption 🌞
In early June, the Lightning community kicked off the summer by stealing the show at Bitcoin 2021: ubiquitous Lightning payments powered by OpenNode, the world’s first in-person bitcoin-powered Esports tournament from MintGox and Zebedee, and of course El Salvador making bitcoin legal tender thanks to the example set by Bitcoin Beach, Galoy, and Strike. Only a few months later, and the rate of adoption has blown us away.
The public network capacity has doubled and shows no signs of slowing down.
Twitter launched the ability to tip accounts over the Lightning Network. The ability to receive tips is currently limited to iOS users in regions where Strike is operating, but any Lightning wallet can send tips. Twitter has 200M+ Daily Active Users (DAUs). Massive.
Paxful enabled Lightning deposits and withdrawals for their 7M+ users in predominantly emerging markets. This integration provides an on-ramp into Lightning for dozens of new fiat currencies and more than 350 payment methods. Huge for bringing bitcoin to billions!
Chivo Wallet, the official bitcoin and Lightning wallet from the government of El Salvador, launched and has seen rapid adoption. The most important reason behind this, in our opinion, has been the hard work on the ground by Lightning companies like Galoy, OpenNode, and Ibex Mercado (not to mention the pioneering Bitcoin Beach community in El Zonte) who have onboarded merchants of all shapes and sizes, from small-scale local coffee shops to some of the largest corporations in the world.
As this summer of Lightning adoption comes to a close, the inevitable fintech and social media executive conversations about a 2022 “crypto” strategy can be shaped by these recent Lightning launches that are live now, reach millions, and have minimal cost. The Lightning Network has successfully onboarded a Latin American nation-state and one of the largest social media companies on the planet. The benefits of joining this new open monetary network, and connecting with its existing user base, now far outweigh the cost of running a node. Instead of trying to compete with the network itself, why not join it? More and more people are coming to this conclusion, bringing us closer to the Lightning Network’s tipping point. More on that later… 🚀
News & Updates
🛣️ LN Markets routed more than 200 BTC since their launch in 2020. Data from our own Alex Bosworth lines up with theirs, as Alex routed 200+ BTC in 2021 alone (4x his rate in 2020!). LN Markets also shared they had users from 92 countries this past month.
🗺️ Bitrefill shared their top 15 countries in terms of Lightning Network payment count percentage. El Salvador leads the list, followed by Brazil, Nigeria, and South Africa. Emerging markets ftw!
🍬 Lightning Crush, a Lightning-based mobile game, had more than 90k Lightning transactions and distributed more than 1.7 million sats in a little over a month.
🤑 Zebedee announced an $11.5M Series A fundraise led by Lakestar with participation from Initial Capital, New Form Capital, TVP, and numerous gaming angels, along with some of their existing investors.
🏞️ River Financial published a great blog post by their engineer Philip Glazman, which dives into the technical strategy for River’s Lightning infrastructure and shows how it benefits their clients and the Bitcoin network.
🐿 Allen Farrington and Big Al wrote a “A Philosophical, Technical, and Economic Critique of Prospects in “Crypto” Beyond Bitcoin” that discussed Lightning's potential for payments, data transfer, asset issuance, financial products, and more. Must read!
🕸️ Namecheap has Lightning payments set up on its platform and will launch soon. They had 190,000 sales paid with on-chain bitcoin over the past year, imagine when their customers can send nearly-free and nearly-instant Lightning payments instead!
🌍 Bitnob is giving API access to companies who want to build services interfacing directly with Bitnob user accounts. The wave of African businesses integrating Bitcoin and Lightning payments will amaze!
🔌 Elektra, a Mexican financial and retailing corporation, will accept lightning payments in their store network. Owned by the billionaire Ricardo Salinas, the company operates more than 7,000 points of sale in Mexico, the United States, Guatemala, Honduras, and Panama.
💰 OkCoin’s new API allows users to perform Lightning deposits and withdrawals from the exchange without touching the website. Imagine if all exchanges have similar APIs what that could do for arbitrage!
👨🔧 Voltage’s API is live! Through their API you are able to do everything you could via the dashboard. This includes creating, stopping, starting, upgrading, and connecting to your nodes.
🌕 Moon, a platform that allows users from all over the globe to fund digital Visa cards with bitcoin over Lightning, raised $2.1M to expand its geographic reach.
⚡ Lightning Jobs is the place to go for discovering all of the open roles at companies building the Lightning Network. Let’s change the internet and global finance together!
🖥️ Alby is a new Lightning Browser Extension by Michael Bumann. It provides payments and authentication flows for websites and you can connect different wallet interfaces to it. They’re looking for beta testers!
📹 Reason published an amazing short video with Fodé Diop explaining how Bitcoin and the Lightning Network can free Senegal and other CFA nations from French monetary colonialism. Keep up your peaceful battle Fodé!
🌩 ThunderCloud allows you to deploy a Lightning node on Amazon Web Services. It makes it really easy to run a node cheaply in the cloud, less than $5 per month if you run LND in neutrino mode!
🏧 Lightning ATM is the new project from Lightning Store where you can automatically purchase Azteco vouchers over their website and redeem them using any LNURL supporting Lightning wallet. Easy as can be!
🔦 Blixt Wallet is a new self-custodied mobile Lightning wallet that is growing and evolving quickly. Most recent updates added support for sending to Lightning Addresses, a Lightning contact list, and a “keysend experiment”.
🌬️ Breez rolled out a new update supporting Boostagrams, messages with embedded tips, and the ability to send to a Lightning Address. Their new “Lightning in the Wild” post highlights how a family is living on the Lightning Network.
🎓 The Bitcoin Layer is the new research publication started by Nik Bhatia. The author of Layered Money is continuing to educate the world about BTC/LN, but with one big change: now you can pay your subscription via Lightning on Substack!
🐒 SaruTobi is now available on iOS and Android! Stack some sats while you swing your monkey over and over in this game by MandelDuck.
💬 Sphinx Chat, the Lightning-based chat app, released a local development environment to help Lightning developers prototype and test their chatbots.
🐂 Kollider explains in this piece how the Lightning Network can benefit traders, improving capital management and reducing collateral demand. Lightning makes trading and arbitrage faster and easier!
🌹 Paxful went to El Salvador to witness Bitcoin adoption from the ground. Watch them spending Bitcoin from their Lightning wallet during their 5 day trip to El Salvador and meet the adorable Mama Rosa that kickstarted the country’s adoption.
🦷 Bitcoin Smiles wanted to raise 1 BTC to provide critical dental care to the people in El Salvador. A little less than a month later..they’re 80% over their original goal and 90.7% of the donations were over Lightning. Look at these beautiful Lightning smiles!
🎁 Human Rights Foundation announced their Q3 gifts from its Bitcoin Development Fund. 375 million satoshis were distributed among 10 projects, including LNbits and Qala.dev, a program to help train and grow new Bitcoin and Lightning developers in Nigeria and wider Africa.
💳 Ben Arc demoed an offline Point-of-Sale device using LNURL that can be built for less than $10! Ben is going to host workshops on building these at HCCP21 in Prague and Adopting Bitcoin in El Salvador.
Reaching the Tipping Point 🏔
In his 2002 New York Times bestseller, Malcolm Gladwell defined the Tipping Point as “that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire.” For those of us working on the Lightning Network in the summer of 2021, the phrase “spreads like wildfire” resonates. The pace of growth and the rate of new integrations has astounded, and seems to be only accelerating as time goes on.
The theoretical tipping point for a network technology like Lightning (or like Facebook or the Internet before it) occurs when the benefits of joining said network outweigh the costs of doing so. Once this tipping point has been reached, the adoption curve turns vertical as more users join the network and increase the benefits for future users joining the network in a positive feedback loop. After this point, a competing network must provide a 10x better experience in order to peel users away and chip away at the incumbent’s network effects.
So, have we reached the Lightning Network’s tipping point?
An important criterion for this vertical shift in adoption is that the cost of joining the network for an individual user must stay small in comparison to the benefits received. In the years leading up to this summer, an enormous amount of effort had gone into making the experience of joining the Lightning Network as friction-free as possible — from companies integrating Lightning into their existing user experiences like Twitter and Paxful, to brand new experiences for brand new users like Chivo.
We have certainly seen vertical growth in public network capacity, and in total users that could be connected to the Lightning Network. But the question of stickiness remains: how many of these potential total users will be converted into DAUs? Do we have a critical mass of developers and developer tools to keep this flywheel spinning?
Regardless of where we are on the adoption curve, the next steps are clear: double down on investment in the developer community and in lowering the friction for new users joining the Lightning Network.
As a point of reference, Okcoin invested in the Lightning developer community by sponsoring a track at this past weekend’s Shellhacks hackathon, Florida’s largest hackathon. There were 3,000 total attendees at the hackathon, with nearly a hundred in Friday’s Lightning workshop, and 21 projects produced for the Lightning track. Pretty impressive work for college students that had never heard of Lightning until Thursday’s Twitter integration announcement.
In order to reach the tipping point, the Lightning community needs more hackathons like Shellhacks, and to keep lowering the barrier to entry for new developers. We need to bring Lightning to more developer communities, get more interest and engagement, and watch the adoption trend continue to go vertical. No reason to leave it up to chance, there’s too much work left to do. ⚡️
Lightning Labs News
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Elizabeth Stark discussed the Lightning Network’s summer of growth at the SALT Conference and was interviewed by Paxful about their Lightning Network integration.
Lucas Ferreira talked about the Lightning Network and his role as a Lightning Evangelist with Bitcoinheiros (in Portuguese).
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