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You may not have heard of the Lightning Network, but it could be the most remarkable payment network out there. Built on top of Bitcoin, it serves as a second layer network, enabling instant and cost-effective Bitcoin transactions without the need for intermediaries. The Lightning Network is revolutionizing global money transfers, making them faster, more efficient, and cheaper than traditional financial systems.
Alyse Killeen, founder and managing partner of Stillmark VC, describes the Lightning Network as a payments technology that democratizes access to the global economy, providing a quicker and more affordable way to transact both online and offline. Stillmark VC, established in 2019, was the first venture capital firm focused on Bitcoin investments.
Killeen is optimistic about the potential of the Lightning Network in several aspects. With Lightning, businesses can extend their market reach to the unbanked population. It also allows for smaller payments, reducing risks and costs in the remittance market.
In South America, two visionary founders are tapping into the payments and remittance sector, expanding financial services to areas where traditional methods fall short.
Piero Coen, founder of Osmo, explains that Latin America and the Caribbean receive over $140 billion in cross-border payments, indicating a need for simplifying the process. Osmo is a mobile payment company that leverages the Lightning Network, enabling people in Latin America to send and receive money using a mobile app. Its aim is to make digital payments faster, cheaper, and more accessible, particularly for those without bank accounts.
With Osmo, the received Bitcoin is automatically converted to the local currency of the user, making it simple and easy to use for everyone. The company believes that universal participation in the financial system is a human right and aims to bank the unbanked in regions where the legacy system poses challenges. This feat is made possible by utilizing Bitcoin and Lightning as payment rails, rather than holding the asset.
Another player in the game is Ibex, a Bitcoin infrastructure company that specializes in providing enterprise solutions for the Lightning Network. They offer “Lightning-as-a-Service” infrastructure to facilitate quick and scalable deployment, allowing clients to leverage the Lightning Network for instant global value transfer at any scale.
Jose Lemus, CEO of Ibex, envisions a world where transactions are processed instantly, revolutionizing commerce by reducing settlement risk and transaction fees for small businesses, especially in South America. Ibex has secured a partnership with Grupo Salinas, further expanding their list of strategic alliances with businesses eager to embrace emerging technologies for global expansion.
Both companies facilitate instant value transfer over the Lightning Network, where payment recipients either don’t need to receive Bitcoin or don’t have to interact with it directly—it simply serves as a tool for seamless transactions.
As the power and efficiency of Bitcoin and Lightning become more evident, leveraging them as payment rails will likely become commonplace. Bitcoin’s increasing presence in underdeveloped economies could lead to a new wave of adoption, with people unknowingly using Bitcoin in their daily transactions. The Lightning Network is set to reshape the foundations of commerce and pave the way for a more efficient future, creating a transformative technology that defies tradition.