You can now send Bitcoin for free on Cash App, thanks to Lightning
Jack Dorsey’s Cash App has rolled out free Bitcoin Lightning Network transactions to its users, marking the cheapest implementation of Bitcoin’s peer-to-peer cash functionality to date.
The Lightning Network is Bitcoin’s most popular way to reduce fees and increase speed. It’s a proposed scaling solution that doesn’t rely on a native utility token.
The feature is live for most iOS users. Dorsey’s fintech company Block (formerly Square) has said additional operating systems will be supported within a few weeks.
To promote CashApp’s ability to handle Bitcoin payments, Golden State Warriors shooting guard Klay Thompson offered a $1 million BTC giveaway to App users on Tuesday.
Cash App limits users to sending and receiving $7,500 worth of Bitcoin each week.
Lightning, a response to Bitcoin’s block size
By temporarily lifting transactions off the first layer blockchain, Lightning Network provides “Layer 2” scaling to Bitcoin’s block size limit of 1MB.
Users send regular Bitcoin within Lightning’s mesh network of payment channels using smart contracts.
People route and rebalance for negligible fees. Lighting users only pay full fees to settle onto Bitcoin’s blockchain when they altogether enter or exit a payment channel.
Bitcoin’s block size limit allows over 14,000 users around the world to run fully validating nodes with cheap, household equipment (the entire 400GB blockchain can be stored on a $50 hard drive).
Although 1MB blocks limit Bitcoin’s first layer to about seven transactions per second, proponents say Lightning could theoretically process 40 million transactions per second.
Read more: [Bitcoin’s Lightning Network is now under surveillance by US government spooks]
Dorsey has supported Lightning since at least 2019 when he told podcaster Stephan Livera that he considered integrating it with Block less of an if and “more of a when.”
Dorsey’s Spiral (formerly Square Crypto) released its so-called Lightning Development Kit (LDK), a wordplay on Software Development Kit (SDK).
LDK assists the integration of Lightning Network into applications and addresses some technical issues that impact performance.
In September 2021, Twitter enabled Bitcoin tipping via the Lightning Network. Dorsey still served as Twitter’s chief exec at that time; he resigned in November.
Bitcoin on Cash App or Silicon Valley tokens?
Dorsey is a staunch supporter of Bitcoin and a strident critic of token sales and Web3. When rapper Cardi B asked, “Do you think crypto is going to replace the dollar?” Dorsey responded unambiguously, “Bitcoin will.”
“Bitcoin changes everything for the better. And we will forever work to make Bitcoin better,” Dorsey professed last May. He has repeated his Bitcoin-only focus on numerous occasions,.
Dorsey calls Web3 a way for venture capitalists (namely Andreessen Horowitz) to enrich its own partners.
As the leading Silicon Valley investor in altcoins, the firm has generated enormous profits by liquidating its pre-sale allocations into retail buyers.
According to tech investor Jason Calacanis, Andreessen Horowitz reneged on a major bailout of Dorsey’s cash-strapped Twitter during its lowest months a few years back.
So, it seems Dorsey has not forgotten that betrayal.
Read more: [The Metaverse and ‘Web 3’ aren’t even here and they’re already cringe]
Block’s ‘zero fee’ Lighting settlement could also be viewed as demonstration that Bitcoin can do cheap transactions — just like many tailor-made altcoins backed by VCs like Andreessen Horowitz.
In any case, a raft of other firms have adopted Lightning Network, including San Francisco-based River Financial, NYDIG subsidiary BottlePay, and Argentina-headquartered Bitcoin wallet Belo.
Blockchain analytics unit Chainalysis also added Lightning Network to its regulatory compliance solution in December.
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