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That release yesterday on Lightning Network is a news that potentially can change the future of Bitcoin.
The Bitcoin blockchain does not natively support complex smart contracts, and it has some strong limitations regarding the supported throughput (TPS).
In order to evolve, Bitcoin needs to leverage layer-2 solutions, just as Ethereum is also partially doing, and Lightning Network (LN) is by far the main second layer of Bitcoin.
Summary
The latest news on the Bitcoin Lightning Network
Many companies are working on developments on LN, and among them is Lightspark, whose co-founder and CEO is the famous David Marcus who was responsible for leading the development and launch of Facebook’s crypto project (Libra) which was later aborted by the company.
Marcus actually started his high-level career at PayPal, and then from there he moved to Facebook, even before the latter changed its name to Meta.
He is passionate about Bitcoin, and when Facebook decided to abort the Libra project, mainly due to regulatory issues, he decided to dedicate himself to Bitcoin by founding Lightspark.
The news is that Lightspark is working on several solutions based on Lightning Network with the aim of making it easier for institutions and ordinary people to transfer value via Bitcoin.
Another co-founder of the project, Kevin Hurley, who is also the CTO, stated it.
Lightspark is not only the name of the company, but also the name of their Lightning Service Provider (LSP) that offers an enterprise-level infrastructure to enable even companies to make global payments via LN.
The previous
Hurley also comes from Facebook’s crypto project, which was renamed Diem before it was shut down.
In fact, he stated that with Lightspark they are trying to carry forward the vision they had in Diem, which is to “truly open up the financial world, transforming it into something where you can send money as easily as you send data packets today”.
Hurley added that some of the lessons learned from the failure of the Diem project are that there is a need for something that is truly decentralized and neutral, and that a platform with a lot of liquidity is also required. These are aspects for which Bitcoin now seems perfect, so it is no coincidence that they chose LN as the platform on which to develop their project.
Among other things, a few weeks ago, Hurley himself had announced on his official X profile that Nubank has selected Lightspark to bring Bitcoin Lightning Network and Universal Money Addresses to its platform.
We're so excited to announce that @nubank has selected @lightspark to bring the Bitcoin Lightning Network and Universal Money Addresses to its platform and customers. We are absolutely delighted to work with such a stellar team to bring a much-needed solution to their customers!…
— Kevin Hurley (@kphur) June 25, 2024
Nubank is not just a Brazilian bank, but it is also the largest fintech company in all of Latin America, with more than 80 million customers and a valuation exceeding 40 billion dollars.
The latest big news at Lightspark: a more inclusive financial system thanks to Bitcoin Lightning Network
Lightspark is not just an LSP, because it also offers an SDK (Software Development Kit), liquidity management through routing nodes, and API services.
Their idea is to provide users, such as companies, with a platform that simplifies the use of various Bitcoin protocols and currency exchanges, thus solving what is the single biggest obstacle to the use of these new technologies.
The concept is that the management of all the complexity is delegated to the LSP, so that the user can focus on the simpler and more important activities. Additionally, the use of a properly configured LSP also resolves the compliance issues of transactions with current laws.
Additionally, Lightspark provides a Universal Money Address (UMA) that serves to uniquely identify users’ accounts and to switch from one currency to another.
The other developments
Obviously, however, there is not only Lightspark that is developing on LN.
For example, Ryan Gentry of Lightning Labs recently during an interview talked about the new proposal Great Script Restoration Project by Rusty Russell, which aims to restore previously disabled opcodes, such as OP_CAT, to expand the scripting possibilities on the Bitcoin network.
Perhaps the biggest current technical limitation of Bitcoin is precisely the one related to scripting, given that its layer-1 does not natively support complex smart contracts.
The solution, however, is not to distort the layer-1 of Bitcoin, which does few things but extremely well, but to allow the development of layer-2 that can do them with the same level of security.
The Great Script Restoration aims to provide developers with a more versatile toolkit that allows them a wide range of new functionalities.
The problem is that when talking about Bitcoin, it is always very difficult to obtain a broad consensus for protocol changes. Therefore, it will not be easy at all to pass the idea that the Great Script Restoration is useful and not dangerous.
However, the Great Script Restoration could make Bitcoin more robust, and this is indeed a bull point.
The important thing, however, is that all this clearly shows how development on Bitcoin is not at all at a standstill, even if it does not directly concern layer-1 but subsequent developments.