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January 20, 2022
Analysis

Cash App Set To Bring Bitcoin Lightning Network To Its 36 Million Users

The Lightning Network has been built-in into Cash App, a peer-to-peer fee service operated by Block, beforehand Square Inc.

The characteristic permits transactions between events that aren’t related to the blockchain community. It was created to handle the scalability points with the flagship cryptocurrency.

Bitcoin Lightning Important For Speedy Transactions

Block (beforehand Square), a fintech agency co-founded by former Twitter CEO Jack Dorsey, owns Cash App. The information of the BTC L2 integration was introduced as a notification on the official Cash App app, which Crypto Twitter picked up:

With a throughput of 5 transactions per second (TPS) and a mean transaction price of $1.79, Bitcoin falls far wanting the mark by way of funds.

$1.79 is a cut price in comparison with the highs of April 2021, when transactions value a mean of $62.78. Nonetheless, any transaction costing various cents is impracticable as a extensively accepted fee methodology.

With its layer-2 answer, the Lightning Network supplies large scalability and low cost transaction prices.

It operates by diverting transactions from the principle chain and putting them into peer-to-peer “payment channels” between two events, reminiscent of a purchaser and a espresso store. Once the channel is created, it could possibly deal with an limitless variety of transactions in real-time.

The payer should first lock Bitcoin into the community to open a fee channel. After the recipient has been locked, they’ll bill quantities primarily based on the price of the gadgets and providers offered.

Fees are a mixture of routing charges for sending fee data between Lightning Nodes and Bitcoin transaction charges for opening and shutting channels. These, nevertheless, are nonetheless far lower than direct principal chain transactions.

In November 2021, the Lightning Network’s whole USD worth locked (TVL) peaked at $216 million. Since that point, the TVL has lowered.

TVL locked within the lightning community. Source: DeFiPulse

Block CEO Jack Dorsey, who was beforehand the CEO of Twitter, has lengthy advocated for the software’s inclusion. “It’s not a ‘if,’ it’s extra of a ‘when,’” he told podcaster Stephan Livera in 2019 that they would combine the scaling technology with payments provider Block’s cellular app.

“We don’t think it stops at [bitcoin] buying and selling,” he remarked.

Steve Moser, editor-in-chief of TheTapeDrive and a contributor to MacRumors, tweeted in November that Cash App “is working on Lightning network integration.” Moser stated he found proof that Cash App was getting ready to implement the extra options in December.

According to essentially the most recent data from Business of Apps, Cash App had over 36 million customers within the United States and the United Kingdom.

BTC/USD trades beneath $%ok. Source: TradingView

Related article | Number Of Bitcoin Lightning Network Nodes Jumps 23% In Three Months

Cash App Is Not The Only One Adding The Feature

Belo App, primarily based in Argentina, said on Monday that it has partnered with infrastructure supplier OpenNode to allow Lightning Network entry to its customers.

Julie Landrum, OpenNode’s Head of Growth, said that the deal permits tens of millions of individuals in Latin America to conduct fast Bitcoin transactions.

Last month, ConsenSys, the Ethereum blockchain software program startup, announced an answer that makes blockchain know-how scalable on the Ethereum Mainnet or for personal use, along side Mastercard.

Related article | Lightning Speed: Taproot And The Lightning Network, A Match Made In Heaven

Featured picture from The Block, chart from TradingView.com, and DeFiPulse

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