Another excellent news from the camp of Jack Dorsey. This time it concerns the popular CashApp application. As it turns out, although payments in Bitcoin have long been possible in it, now they can be made on the basis of Lightning Network. This significantly reduces their costs.
Words turned into action
Jack Dorsey has already emphasized for two years that the CashApp application requires integration with the Lighning Network system. So the question was not if it would happen, but when. The beginning of 2022 has become a breakthrough in this regard. Since a few days, users of the payment tool, available in the United States and the United Kingdom, can use Bitcoin’s tier two solutions.
CashApp is part of the Block Company business, which Dorsey co-founded. The app has been available for use since 2017 and has as many as 36 million customers. Therefore, it is not surprising that Dorsey decided to expand the project so that in the face of fluctuating prices for BTC transfer in the first tier, users of the app can benefit from a much cheaper solution.
This is not, by the way, the former Twitter CEO’s first move in favor of Bitcoin this year. Ever since he took the helm of a wing of Block called Spiral, he has been actively involved in developing solutions to serve the Bitcoin network. We wrote about his recent activities in our post titled “Block jobs posted on LinkedIn, reveal plans Jack Dorsey has for Bitcoin”. Be sure to take a look to stay up to date!
Why is there a Lightning Network?
Bitcoin was created to make payments without intermediaries such as banks. However, it turns out that the mass adoption and the explosive demand occurring on the network can significantly drive up transaction costs. These reached their ATH in April 2021 at more than $62. An additional limiting factor is scalability, which allows only 7 transactions per second. The effect of this is that the largest of cryptocurrencies is more often seen as a carrier of value rather than a payment system. With help comes a second layer solution which is Lightning Network. It significantly increases the bandwidth of the network and the costs of the transactions are minimal.
It works thanks to the possibility of moving transactions from the main chain to the system based on peer to peer payment channels. The creation of such a channel provides unlimited payment options. This resulted in the amount of blocked funds on Lightning Network reaching its ATH of $216 million last November. Ultimately, by using a second layer, Bitcoin can be both a store of value and a payment system.
Thus, the opening of CashApp to the Lightning Network, is great news for the app’s users, who gain wider access to the possibilities behind the first and largest of cryptocurrencies.