Why I believe in the lightning network as future of global payments
Why I am so enthousiastic on this user centric payment and monetary system
When I lived and worked in Shanghai a few years ago, one of the things I missed a lot when returning home was the ease of payments. Everything could be done via my mobile phone in such an easy way that it soon became fun to pay something.
It made me realize this payment innovation that China had is something that boosted their economy and made it very easy for those without a bank, people who for example sell on a market stall or even homeless people to get a digital wallet to sent and receive money instantly. This all for a fraction of the costs in the Netherlands alone to get a payment infrastructure in your shop or market stall. It was made to be convenient, user-friendly and to make it easy to do business.
I like UX, I like apps, I like it when it is really made for the user, and it helps the user solving a problem or making something fun. Alipay and Wechat pay the payment providers in China, did exactly that.
Besides that the network is so robust that it never failed me. Compared to the old fashioned PIN network in Netherlands that every year more or less fails during peak season.
I could pay the street food stall where I always bought Jianbing every morning by simply scanning a card on her stall filling in the amount of RMB, press pay show her the confirmation (sometimes) and that's it. The payment is done.
I could pay by letting the shop clerk in the shop scan my QR code and confirm the amount.
I could even operate a vending machine by scanning it's qr code, select the coconut juice I needed, pay and receive the fresh coconut witout ever touching the machine itself.
The payment apps in China are so user friendly, even for foreigners it made it fun to pay!
It always made me dream of having such a payment system in the west. Unfortunately it is still nowhere near that if we look at the regular banks and initiatives.
How I discovered the lightning network
Having seen closed systems and their disadvantages from close by, I was always a big fan of open network systems. It simply improves the quality for everyone.
Bitcoin is such an open system, just as the internet is (in most countries).I wanted to support with my share and for Bitcoin one can do this by starting a bitcoin node. Simply a small computer that downloads the blockchain and helps validate transactions. You don't earn anything with it, just helping to make the network more robust.
Nowadays it not so difficult to setup such a node. I setup my node with Umbrel. The Umbrel node also adds the lightning network to it. So I got to play with the lightning network on my node, opening channels making payments and try different wallets.
The lightning network, really something special
I found this lightning network is really something special. It makes (near) instant global payments possible for literaly no fees (or very very very low fees).
This network has a huge potential and can grow out to a much improved version of wechat and alipay but then globally. Much improved because it is decentralized and open.
- The network is open and is getting improved year on year. It always gets better.
- Everyone can create a digital wallet on this network. If you want to create a very private wallet or a wallet with the best UX or a wallet where you enhance the experience by for example sending back information to the shop where you just bought (thank you great service), anything is possible as it is an open network.
- You can send instantly money to for example an ice cream seller in El Salvador to support him (or to tell him to give ice cream to the local kids).
- You do no longer need a bank everyone poor or rich , everyone with a phone can profit. Just like in the example with the market stall or homeless guy in China, just this time more private and more global.
- With (almost) free transfer of micropayment it is very easy to support any content creator in the world with a click, support podcasters (like already happing with podcast 2.0), or for example tip a customer service representative in India because he or she helped solve your problem.
- It is already possible with for example the "strike" app do use the lightning network without having your own node and to receive local fiat currency (soon across the globe). This is truly amazing. A user story that soon will work as Strike will soon start in Europe is this example:
As a user, I would like to make a payment to a friend in another country/jurisdiction and make sure the my friend receives the money in local fiat currency at the lowest possible costs, so that we both have the most benefit of this money transfer.
How this will work is:
- Person 1 (US) wants to send 100USD from US to Person 2 (UK)
- Person 1 (US) has his bank account linked to the strike app and sends 100 USD to Person2.
- Strike takes 100 USD out of bank Person 1, live convert this to BTC (Bitcoin) in the most efficient way possible.
- Strike sent the BTC across borders to the UK in less then a second and at no cost via the LN. No intermediates.
- Strike converts the transfer to GBP.
- Person 2 (UK) receives GBP.
Many people ask me why #bitcoin is useful. Instead of telling, let's show them. I just send 100.000 sats to this ice cream merchant in El Salvador using the bitcoin Lightning Network. Who joins me? Use the link in the tweet below and share your invoice! https://t.co/FZerfMZ72S— Bart Mol (@Bart_Mol) July 5, 2021
I get very enthousiastic from cross border (e-)commerce and this development makes me so happy, this is truly something that can improve the world and enhance global commerce. We can all benefit. It is the china payment feeling on steroids. More private, open, more global.
Finally a payment system that sets the users in the center. Wether it is the merchant or the buyer.
If you want to know more watch this lightning video below where a lot more is explained and start with setting up a wallet on your phone.