Bitcoin Lightning Startup Goes Beta With Twitter CEO Backing
A version of bitcoin’s much-anticipated Lightning Network is finally ready for real users.
Announced today, California startup Lightning Labs has officially launched a beta version of its software (LND), making available what investors and project leads say is the first thoroughly tested version of the tech to date. This means that users can now leverage LND to send bitcoin and litecoin to other users, all without settling those transactions on the blockchain.
While this software is one of several seeking to form a combined network that aims to make cryptocurrency transactions faster and cheaper, today’s development effectively takes bitcoin a step closer to new kinds of applications, such as Internet of Things payments and recurring billing.
That’s because, similar to bitcoin, the Lightning protocol isn’t managed by any one person or company. It’s a series of compatible technologies. Bitcoin-centric startup Blockstream released a candidate version 1.0 of the Lightning protocol specification in January, and ACINQ, another like-minded startup, already offers a live, yet unpredictable beta software that works with bitcoin.
Still, the Lightning Labs software is believed to be the most mature software to date – and investors are using the launch to signal their interest.
Also revealed today, Lightning Labs has raised $2.5 million from nearly a dozen investors including Twitter CEO Jack Dorsey, Square Capital executive Jacqueline Reses, litecoin creator Charlie Lee and former PayPal COO David Sacks.
While Dorsey and Reses declined to comment other than to confirm they invested, Sacks was vocal in his belief that the beta release marks a crucial moment in bitcoin’s history.
“Lightning is the most important protocol being built on bitcoin and Lightning Labs is the best developer of that protocol,” Sacks told CoinDesk.
Fellow investor Ben Davenport, CTO at the blockchain security company BitGo, agreed the launch is a pivotal milestone.
He told CoinDesk:
“It’s something the entire community has been focused on and working towards for the better part of two years now. It’s really the culmination of a lot of work by many people, not just Lightning Labs. … We see it as a very important piece of the scaling solution for bitcoin, and perhaps other digital currencies as well.”
To Lee’s point, thousands of people around the world contributed to today’s Lightning release, from volunteer testers who helped find bugs in the original alpha version, to developers like Jim Posen at the exchange platform Coinbase, who contributed code through GitHub.
“The community engagement around Lightning has been amazing,” Lightning Labs CEO Elizabeth Stark told CoinDesk, adding that she plans to keep the software freely accessible. “The protocol will always be open source and right now everything we are making will be open source,” she said.
When Stark asked the audience at a recent decentralization summit in Berlin who had already tested Lightning, hundreds of people raised their hands. “We have around 1,800 people on the Slack for LND alone,” she added. “We already have dozens of apps that developers have built.”
But it’s important to note that even this beta should be used with caution.
Stark’s team built in a few safety measures to limit the amount of cryptocurrency people can send for now to roughly $1,400 worth per channel, or around $400 per payment. The target demographic for the release is developers and “advanced users” who are able to run a full node and use LND’s command-line interface.
Stark went on to warn that users should not experiment with more money than they are willing to lose.
“We were not recommending use on the main bitcoin network before this beta because there are certain features, such as a wallet seed backup, that were not there previously. There are new features included as well, there are bug fixes and stability improvements,” she explained.
Still, it’s a release that’s likely to spur interest and engagement, given that developers are already sending money over the network – regardless of warnings.
As such, Stark now expects people with the skills to host their own bitcoin or litecoin node to add Lightning Labs’ free software to the mix for quicker, cheaper transactions. Already, there are already roughly a 1,000 nodes implementing Lightning software. Investors in the project believe the release will boost that growing number.
“What I hope to see, and am optimistic to see, is a Cambrian explosion of development of Lightning-based apps and other things that incorporate Lightning.”
Several contributors spoke of Lightning as a long-term investment in blockchain infrastructure, something that Lee, whose time is dedicated toward a wholly different protocol, spoke to.
A long-time advocate for Lightning, Lee expressed his hope that even more experiments will now be possible with the software, including transactions that occur across blockchains.
“It’s great to see Lightning Network being used in the real world. I’m also excited to soon being able to do cross-chain atomic swaps between bitcoin and litecoin,” he said.
In this way, Lee’s comments can be seen as summing up the impact of the day’s news.
If bitcoin really is the ground floor of the emerging cryptocurrency ecosystem, then Lightning is the first staircase. This release marks a vote of confidence that the staircase really is safe for builders to start, with cautious steps, climbing up.
Copper wiring image via Shutterstock
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