In a panel discussion at the Bitcoin 2023 conference moderated by CNBC technology reporter MacKenzie Sigalos, leaders from some of the biggest businesses building services based on the Lightning Network discussed the opportunities and challenges for Bitcoin’s payments-focused second layer protocol.
The discussion, titled “Building Lightning-Native Companies,” featured Elizabeth Stark, the CEO of software development firm Lightning Labs; David Marcus, the CEO of Lightspark, a firm focused on making Lightning adoption easier and more accessible; and Miles Suter, the Bitcoin product lead at Cash App, a mobile payment platform that introduced Lighting payments to its more than 40 million users in 2022.
„We’ve really reached the point right now where Lightning is maturing and we’re seeing more and more adoption,” Stark said, summarizing the momentum she has seen since she co-founded Lightning Labs in 2016. “People are adopting the network because it is solving real problems for them.“
By allowing peers to create closed payment channels between themselves, which are only settled on the underlying Bitcoin blockchain when closed, the Lightning Network enables bitcoin payments that can take place in seconds while still benefiting from the security of Bitcoin’s base ledger. But as this second layer is relatively young, adoption represents just a fraction of the larger digital payments volume across the world.
The panelists highlighted the importance of developing products and services that make Lightning easier to use and solve some of its outstanding issues, like the network’s relatively-low liquidity and limited number of nodes.
“A channel-based payment network is still very complicated,” Sigalos pointed out. “There’s not a ton of liquidity sitting on the nodes right now” for instance.
In response, Suter noted that many of the challenges in making Lightning more accessible derive from Bitcoin’s most important qualities.
„It’s hard to develop on Bitcoin,” he explained. “We see that everyday… but it’s an intentional decision because we believe that’s what allows it to maintain a very minimal attack surface.”
But the panelists all agreed that when there are significant problems for Lightning to solve, like in countries where it can help people access the dollar or enable more efficient cross-border transactions, adoption is evident. As more of those problems emerge and companies like these continue to build products and services on top of Lightning, they expect adoption to accelerate.
“Making it easy will drive more adoption,” Marcus said. “Between now and next year when we gather again, we’ll be in a much better place when it comes to Lightning adoption.”