The Lightning Network uses peer-to-peer technology to rapidly accelerate Bitcoin payments, letting users carry out rapid transactions for just a few pennies. Its a promising idea that could finally vault Bitcoin into the mainstream but for one problem: Lightning doesnt really work.
Thats the view of David Marcus, who oversaw messaging at Facebook (now Meta) and then led the companys failed crypto project called Diem, which was snuffed out by hostile politicians and regulators. Today, he is the CEO of Lightspark, a startup thats raised $175 million, and which gives Marcusalso a former president of PayPala second chance to preside over a breakthrough moment for crypto.
On Tuesday, Lightspark announced it has launched a software package that the company says will make it easy for businesses to harness the Lightning networks potential benefits.
In an interview with Fortune, Marcus and his team made the case that Lightsparks new servicewhich offers three different pricing tiers based on volumewill make Lightning viable by making the network easy to use and supplying adequate liquidity.
According to Lightspark, the current process for using Lightning is too daunting and technical, even for many companies familiar with crypto and payment operations. And even when users do manage to get set up on Lightning, which relies on a series of peer-to-peer channels connecting to nodes, the network often doesnt work because many node operators do not have enough Bitcoins on hand to immediately process transactions, Marcus claims.
Lightspark claims its solution relies on data science to constantly move liquidity to where its most needed, making the Lightning network more reliable. It has also created software tools that the firm says will make it practical and easy for businesses to usea development that Marcus compares to letting people use the Internet via a browser rather than the underlying TCCP protocol.
Weve made our interface simple, removing all complexity, the company said in a statement. It will be familiar to people in businesses who need to integrate payments into their products and servicesLightspark discovers the best-performing nodes and predicts their ability to successfully route transitions. Our infrastructure is up to 15 times more capital efficient than most alternatives.
The upshot of all this is that Lightspark believes people soon will be able to avail themselves of a wide variety of near-instant, Bitcoin-based payments. The company says that, for practical purposes, this means it will become possible to buy a wide variety of online servicesfrom music to news articles to WiFi accessquickly and cheaply, with little friction.
Marcus says Lightspark is already working with a number of clients, including crypto wallet providers and the Bitcoin bank and storage firm Xapo, to deploy its service.
Lightspark is not the only well-funded company to bet on turning the Lightning network into a mainstream payment tool. Earlier this year, Block (formally Square), announced a series of initiatives that it says will help solve the networks liquidity woes.
These initiatives come after more than a decade of Bitcoin failing to become part of everyday commerce, despite proponents hailing it as a superior payment technology. Marcus, however, believes that this moment will finally arrive, and that Lightspark will play a key role in delivering it.
