Ask the Expert: What is most exciting about the future of the Lightning Network?
We sat down with our Director of Product for Lightning Network, Dulce Villarreal, to learn more about the ways the Lightning Network is set up to revolutionize the payment industry.
The Lightning Network is a revolutionary protocol for the financial industry. The Lightning Network brings all the benefits of Bitcoin — such as code that is open source and verifiable, decentralized, borderless, and programmable — plus the advantage of having lower, or even zero, transaction fees.
The Lightning Network offers several exciting benefits that will revolutionize the way we think about payments, nano payments, e-commerce, and cross-border remittances.
So, what’s the potential for Lightning Network?
1. It can revolutionize the payment industry
The Lightning Network has the potential to revolutionize the payment industry by simplifying the complex, fragmented, and outdated settlement system that we currently rely on. With fewer intermediaries and lower costs for small businesses, the Lightning Network could make it easier and more cost-effective for businesses to accept electronic payments. Additionally, since it is open and not controlled by any single entity—aka, decentralized—there is flexibility and scalability in how the Lightning Network is deployed. This provides an opportunity for larger, more centralized organizations to partner in delivering proper network throughput while keeping costs to an absolute minimum. At the same time, there’s still room for smaller players in the market (or even individual merchants) to connect to the network.
2. It enables new business models based on nano payments
With the Lightning Network, the cost of nano payments could be almost zero, making it possible for businesses to offer new and innovative business models based on nano payments in satoshis. For example, content creators could earn satoshis on revenue for each second that someone watches or listens to their content, and users could earn rewards or passive income for sharing links or making small purchases.
3. It facilitates cross-border remittances
The Lightning Network is especially well-suited for cross-border remittances, as it allows instant, low-cost money transfers between people in different countries. This is particularly beneficial for immigrants and people living in developing countries; normally, the poorest pay high fees and sometimes unfair exchanges when sending money back home.1 With the Lightning Network, it's possible to send money across borders quickly and at a much lower cost. And real players are already doing this important work. Strike, whose international money transfer service runs on the Lightning Network, has expanded its service to multiple countries across the globe.2
4. It is a tool for fighting for human rights
Bitcoin and the Lightning Network are powerful tools for activists and people living in countries without healthy democracies. Bitcoin is a global currency that can be used to send money across borders, and the Lightning Network allows for instant, low-cost transactions, making it an ideal tool for activists and human rights organizations that need to move money quickly.
Overall, the Lightning Network will revolutionize the world of payments. It's an exciting time to be at Bakkt working in Lightning Network and to be part of the Bitcoin community, and we're likely to see many more exciting developments in the future as the Lightning Network continues to evolve and mature.