Why Lightspark is Building on Lightning

Lightspark is grounded in the vision of an open money protocol for the internet, one that enables businesses and individuals to send money as quickly and easily as data flows over the internet.  In today's interconnected world, the need for a seamless and universally accessible payment system has become increasingly apparent, and we believe that there is an unprecedented opportunity to establish a global, interoperable internet of money. Our conviction is that the way to do this is through the Lightning Network - a layer 2, open protocol on top of Bitcoin.

Despite some advances in payment services over the past few decades – particularly outside the United States – we do not yet have truly global, interoperable payment services. And some forms of payments – such as cross-border payments – remain extremely slow and expensive. Reliance on decades-old infrastructure can also limit new types of payment activities and services, particularly for online markets where the absence of an internet-native form of payment is particularly noticeable. 

But why do we think of the Lightning Network as a possible solution to these problems? At a more fundamental level, why are we choosing to build on Bitcoin? Although originally designed to serve as an internet-native means of payment, over the years, people have claimed Bitcoin cannot scale, is too expensive, and is too slow.  New blockchains and cryptocurrency projects have been founded on these claims. 

So why do we, at Lightspark, believe that Bitcoin and the Lightning Network can be the right solution?

First, Bitcoin has properties that make it particularly suitable as an open payments infrastructure layer:

• Bitcoin is the original and longest-operating blockchain. It has operated for more than 14 years and has shown resilience, including through changes and upgrades to the network. This type of resiliency is an essential foundation for payments infrastructure.
• Bitcoin is an open protocol - a system that allows anyone to participate without the need for permission or approval from a central authority - fostering inclusivity and innovation.
• Bitcoin enjoys extensive network effects across a broad range of market participants. Major financial institutions, institutional investors and market participants, and retail market participants across the globe have invested time and resources integrating and using Bitcoin.  There is deep liquidity in bitcoin markets and many existing holders and users of Bitcoin.
• Bitcoin has the largest market cap of any cryptocurrency and thus has significant capacity to support payment activities. There are bitcoin currency trading pairs for all major fiat currencies and other cryptocurrencies with a wide variety of endpoints to support payment transactions on Bitcoin.
• Bitcoin has the most regulatory clarity of any cryptocurrency, reducing uncertainty for service providers and users of Bitcoin-based services.  Which is of critical importance in the current regulatory and policy environment.

While Bitcoin lacks some features of newer blockchains, its relative simplicity makes it more suitable for payments use cases, which must prioritize stability, security, and reliability over rapid development and new-frontier use cases.

But Bitcoin alone cannot be easily used as open payments infrastructure. Settlement takes too long, and transactions are far too expensive when the network is congested. The Lightning Network emerges as the key to addressing these limitations.  Designed to be nearly infinitely scalable, the Lightning Network matches the performance of the highest-performing payment networks, ensuring rapid throughput with near-instant settlement. Privacy concerns associated with on-blockchain payments are also alleviated on Lightning, as transactions occur directly between counterparties, enhancing confidentiality. Additionally, Lightning enables innovation and new use cases. When small payments move at negligible cost, it becomes economically viable to enable a broad swath of novel payment activities, such as the streaming of money in real-time.

Lightspark's choice to build on the Lightning Network stems from the unparalleled advantages it offers for creating an open, interoperable internet of money - where value moves as effortlessly as TCP packets do on the internet today. As we forge ahead, our mission remains resolute: to establish Lightning as the standard for intuitive, scalable, and cost-efficient payment solutions.