During this year’s bitcoin 2024 conference, I was repeatedly asked what my standout moment was — what was the signal amidst all the noise. When I returned from Nashville, I realized that each time I was asked, I could never satisfactorily answer the question.
Partly because I just couldn’t keep up. The activity on the news desk and my support for those running the show left me little time to focus on anything else. I can’t say I have any regrets. Anyone who has stopped by our livestream studio during the week can attest to the energy that surrounded it. The bitcoin Magazine news desk was the true heart of the conference.
Now that I’ve had time to gather my thoughts, I can safely say that the thing that stood out the most at the conference was the low-key presence of the Lightning Network. In other times, this would have been a concern, but this time was different. I realized that Lightning had not only arrived, but matured beyond what any other scaling layer can realistically claim.
The payment protocol, which flew largely under the radar, has quietly inserted itself into every piece of bitcoin’s core infrastructure. Most of the world’s major exchanges now support it, with some of them running the network’s largest nodes. The network’s dollar-denominated capacity is at an all-time high, and all of the traders I spoke to this week confirmed that its reliability is rapidly improving.
While it might have seemed to the casual conference attendee that Lightning had taken a backseat to other popular and promising protocols, it became clear during the conference just how far ahead it is of the rest of the field. While I was fortunate to meet many talented people working on this next generation of bitcoin technical design, I left the event with more questions about its progress than when I arrived. Lightning, on the other hand, answered many concerns about its state and the road ahead.
Places of interest about the settlements
A recurring theme throughout the event was the protocol's promises as a settlement network. Initially touted as a retail payment solution, Lightning's latest and greatest advancements could come among businesses and institutions looking to meet liquidity needs. The vision, most notably popularized by Jack Mallers at Strike, seems more concrete than ever, with infrastructure firm Lightspark now at the forefront of these achievements. Last Thursday, on the Nakamoto stage, sparks of light Co-founder Christian Catalini defended Lightning's favorable position as a bridge between businesses and various financial institutions:
If we think about the challenge of moving value not just between a few countries, but between two hundred or more countries, every day, 24/7, with high liquidity, there is only one asset, and that asset is bitcoin. It has regulatory clarity, it has on-ramps and off-ramps in virtually every country in the world. We can now connect it all in an open way.
Lightspark's recent announcement of its partnership with Latin American banking giant Nubank clearly outlines the potential for existing businesses to modernize their infrastructure using the Lightning Network.
To further reinforce the idea of Lightning as a way to connect the global economy, last week’s launch of Lightning Labs’ Taproot Asset protocol presents another opportunity for the scaling layer to establish itself as the dominant value transfer protocol on the internet. Before Lightning can get to VISA, it may have to start by displacing SWIFT.
Improving payments
When it comes to payments, the topic of conversation in Nashville was the improved user experience brought about by the arrival of features like BOLT12.
This payment protocol, which has been in development for years, offers users an intuitive way to receive Lightning payments without relying on unreliable, time-barred invoices. It also paves the way for improving users’ ability to receive payments offline, a major problem with current implementations.
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Introducing twitter.com/hashtag/TwelveCash?src=hash&ref_src=twsrc%5Etfw”>#DoceCashan easy way to share your bitcoin payment information with the world. image.twitter.com/tynzAVEEEt
— Stephen DeLorme (@StephenDeLorme) twitter.com/StephenDeLorme/status/1814009152819089737?ref_src=twsrc%5Etfw”>July 18, 2024
BOLT12 achieves this through static, reusable offers that do not compromise the privacy of the recipient. Combined with other innovations such as bitcoin.it/wiki/BIP_0353″>DNS Payment InstructionsIt is now possible to create human-readable bitcoin addresses (e.g. [email protected]) that support different payment formats. Imagine using a single identifier to receive payments on-chain and via Lightning, regardless of your preferred standards. Twelve.effectiveA featured project from this year's conference bitcoin-games”>hackathondid a remarkable job of highlighting the versatility of this technology, implementing “a simple way to share your bitcoin payment information with the world.”
Other forms of human-readable addresses using the LNURL format have been around for some time, but the hope is that users will converge towards more mature solutions. Long-time Lightning infrastructure provider Amboss also x.com/ambosstech/status/1817220766318084236″>Announced During the event, a new Lightning wallet was introduced that supports a novel multi-asset payment system they called “MIBAN.”
Open, permissionless financial systems are expected to experience fragmentation across standards and compatibility issues. Lightning is beyond any alternative in terms of optimizing these interoperability challenges to ensure seamless payment experiences.
BOLT12 is currently supported by major wallets such as Phoenix and ZEUS, and I could land Coming soon to the Strike app.
After bitcoin Park’s Lightning Summit, which was held around the same time last year, I remember feeling pretty disillusioned with the prospects for consumer Lightning apps. What a difference a year makes! While a fully non-custodial experience may always command a premium price, new optimizations and different security models are emerging that can satisfy retail users wherever they are.
Infrastructure at scale
This progress, at all levels, would not be possible without the enormous efforts that have been made in infrastructure in recent years.
Lightspark, which supports Lightning integration for other industry giants like Coinbase and Bitso, is powered by Spiral. Lightning Development Kit (LDK). The recently announced Alby Hub is also the first production wallet deployed using LDK node library.
Keep in mind that LDK has been in development for almost four years. Good things take time. Many of the people I spoke to during the conference expect the scope and quality of projects implemented using this toolkit to accelerate significantly.
Another sign of the evolution of Lightning infrastructure came with the launch during the week of Breez LDK's new Liquid integration. This is a trend that is gaining momentum and has been started by Boltz exchange services. It is used in wallet applications such as WaterLiquid allows developers to use the cheap fees of the sidechain network to settle transactions on and off Lightning in L-btc. While this comes with compromises in custody, proponents argue that it is still a superior option to fully custodial Lightning wallets.
The conference also discussed the progress made in the specification level of Lightning Service Providers (LSPs). As a result, the quality of service providers on the network has increased significantly. LSPs are used to provide infrastructure support and liquidity provision to businesses that want to connect to the Lightning Network.
Zeus founder Evan Kaloudis shared his company's efforts in this direction:
Since legal uncertainty arose in the space following the arrest of the Samourai Wallet developers, we have doubled down on our efforts and now have two different services providing users with connectivity to the Lightning Network. We have also greatly expanded the Olympus LSP user base – we are now not only powering the ZEUS wallet, but we also have integrations across a total of four different wallets, including a role as the default LSP in Mutiny Wallet.
Security is another area of the protocol that is experiencing impressive growth. x.com/spiralbtc/status/1792584819366416527″>Sean Gillian, Spiral beneficiaryThe Validating Lightning Signer (VLS) work will play a major role in scaling this technology to advanced users. Enabling operators to leverage secure enclaves to protect active signing keys and set spending policies will be a requirement for onboarding the next wave of institutional players.
In a panel I presented on Saturday afternoon about Lightning for Institutions, one of the protocol's creators, Tadge Dryja, expressed keen interest in developing more secure key management processes.
We've figured out how multi-signature support can be implemented for Lightning nodes. We've done the math and we know it works. Now we need to work with everyone to make it happen.
It wouldn't be an infrastructure section without mentioning the massive innovation around the Nostr protocol and its implications for Lightning. One of my favorites Release day The projects at the conference were Flasha new payment gateway platform that leverages Nostr for seamless integration of Lightning into any Internet service or product. The implications of using the Nostr messaging protocol as a bridge between bitcoin applications have yet to be fully appreciated. The Flash team has a x.com/CierrePorbin/status/1806740356894998839″>amazing vision For that. Greetings also to Justin from x.com/ShockBTC”>Shock net who I met and is exploring many interesting ways to scale the Lightning protocol using Nostr's magic sauce.
It's time to stop Lightning's disappearance.
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