Cash App has integrated the Lightning Network into it. This peer-to-peer payments service is operated by Block and previously Square Inc.
The feature allows transactions between parties that aren’t connected to the blockchain network. This feature was designed to solve the scaling issues associated with the main cryptocurrency.
Bitcoin Lightning: Important for Speedy Transactions
Cash App owns Block (previously Square), an fintech startup co-founded and owned by Jack Dorsey. Crypto Twitter received a notification about the BTC L2 Integration via the Cash App App.
— Yegor Petrov 🔑⚡️ (@yeg0rpetrov) January 11, 2022
Bitcoin’s payments performance is not up to par with its five transaction per second (TPS), which averages $1.79.
$1.79 seems like a great deal compared with the $62.78 average for transactions in April 2021. As a payment option, it is impossible to accept transactions exceeding a few cents.
The Lightning Network’s layer-2 solution provides great scalability with low transaction costs.
It operates by diverting transactions from the main chain and placing them into peer-to-peer “payment channels” between two parties, such as a buyer and a coffee shop. It can manage an infinite number of transactions at once, even after the channel has been created.
In order to create a payment channel, the recipient must first deposit Bitcoin on the network. Once the receiver has been blocked, the recipient can invoice amounts according to the amount of items or services they have purchased.
These fees include routing fees to send payment information between Lightning Nodes as well as Bitcoin transaction fees that are used for closing and opening channels. They are however much less than the direct mainchain transaction fees.
In November 2021, the Lightning Network’s total USD value locked (TVL) peaked at $216 million. The TVL has decreased since then.
TVL is locked into 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 a ‘if,’ it’s more of a ‘when,’” he told podcaster Stephan Livera in 2019 that they would combine the scaling technology with payments provider Block’s mobile 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 said he discovered proof that Cash App was preparing to implement the additional features in December.
— Steve Moser (@SteveMoser) November 15, 2021
Cash App has over 36,000,000 users worldwide, according to Business of Apps’ most recent statistics.
BTC/USD trades lower than $%k Source: TradingView
See also:|The Number of Bitcoin Lightning Network Nodes has risen 23% in three months
Cash App isn’t the Only One to Add The Feature
Belo App is based in Argentina and announced Monday that OpenNode, an infrastructure provider, has joined forces with it to provide Lightning Network access for its customers.
Julie Landrum, OpenNode’s Head of Growth, stated that the deal allows millions of people in Latin America to conduct quick Bitcoin transactions.
ConsenSys was the Ethereum blockchain startup and announced last month that it has a solution which makes blockchain technology scaleable on the Ethereum Mainnet, or private use. It is in partnership with Mastercard.
See also:|Lightning Speed: Taproot and The Lightning Network, A Match Made in Heaven
Featured image taken from The Block.