The Lightning Network is integrated into Cash App, a peer-to-peer payment service operated by Block, formerly Square Inc.
The feature allows transactions between parties that are not connected to the blockchain network. It was created to address scalability issues with the major cryptocurrency.
Lightning Bitcoin is important for fast transactions
Block (formerly Square), the fintech company co-founded by former Twitter CEO Jack Dorsey, owns the Cash app. News of BTC L2 integration was announced as a notification on the official cash app, picked up by Crypto Twitter:
– Yegor Petrov 🔑⚡️ (@yeg0rpetrov) January 11 2022
With a transfer rate of five transactions per second (TPS) and an average transaction price of $1.79, Bitcoin falls far short of the bar in terms of payments.
$1.79 is a bargain compared to its highs in April 2021, when the transaction cost was $62.78 on average. However, any transaction that costs more than a few cents is impractical as a widely accepted payment method.
With its Layer 2 solution, the Lightning Network offers massive scalability and low transaction costs.
They work by shifting transactions off the main chain and placing them in peer-to-peer “payment channels” between two parties, such as a buyer and a coffee shop. Once the channel is established, it can handle an infinite number of transactions in real time.
The payer must first lock Bitcoin into the network to open a payment channel. After the recipient is locked out, they can bill the amounts based on the cost of items and services sold.
The fee is a combination of routing fees for sending payment information between Lightning Nodes and Bitcoin transaction fees for opening and closing channels. However, these are still significantly lower than the direct main chain transactions.
In November 2021, the total value of the Closed Lightning Network in US dollars (TVL) peaked at $216 million. Since that time, TVL has declined.
TVL locked in the lightning network. Source: DeFiPulse
Block CEO Jack Dorsey, who was previously the CEO of Twitter, has long advocated for the tool’s inclusion. It’s not an ‘if’, it’s a ‘time’ more that it will combine scaling technology with the payments provider Block’s mobile app, he told broadcast moderator Stefan Levera in 2019.
“We don’t think it stops at [bitcoin] Buying and selling “.
Steve Moser, editor-in-chief of TheTapeDrive and MacRumors contributor, tweeted in November that the Cash app is “working on the Lightning Network integration.” Moser said he discovered evidence that the Cash App was preparing to implement additional features in December.
– Steve Moser (@SteveMoser) November 15 2021
According to the latest data from Business of Apps, Cash App has had more than 36 million users in the US and UK.
BTC/USD trades below $%k. Source: TradingView
Related article | Number of Lightning Network Nodes in Bitcoin Jumps 23% in Three Months
Cash app is not the only one that adds the feature
Argentina-based Belo App said Monday that it has partnered with infrastructure provider OpenNode to enable the Lightning Network to reach its users.
Julie Landerm, Head of Growth at OpenNode, stated that the deal allows millions of people in Latin America to make fast bitcoin transactions.
Last month, ConsenSys, an Ethereum blockchain software startup, announced a solution that would make blockchain technology scalable on the Ethereum Mainnet or for private use, in conjunction with Mastercard.
Related article | Lightning Speed: Root Core and Lightning Network, a match made in heaven
Featured image from The Block, chart from TradingView.com, and DeFiPulse