Will Lightning Network also come to institutions?

The news released yesterday on Lightning Network is news that can potentially change the future of Bitcoin.

The Bitcoin blockchain does not natively support complex smart contracts and has some severe limitations in terms of supported processing power (TPS).

To evolve, Bitcoin needs to leverage layer 2 solutions, just like Ethereum is doing to some extent, and the Lightning Network (LN) is by far the second major layer of Bitcoin.

The Latest on Bitcoin Lightning Network

Many companies are working on the development of LN, and among them there is Sparkle of lightswhose co-founder and CEO is the famous David Marcus, responsible for the development and launch of Facebook’s cryptographic project (Libra), later abandoned by the company.

Marcus actually started his high-level career at Payment via PayPaland from there he moved to Facebook, even before the latter changed its name to Meta.

He is passionate about Bitcoinand when Facebook decided to abandon 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 goal of making it easier for institutions and ordinary people to transfer value through Bitcoin.

This was stated by another co-founder of the project, Kevin Hurley, who is also CTO.

Lightspark is not only the name of the company, but also the name of its Lightning Service Provider (LSP), which offers an enterprise-grade infrastructure that also allows businesses to make global payments via LN.

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Hurley also comes from Facebook Encrypt project, which before being closed had been renamed Diem.

He said that with Lightspark they are trying to carry forward the vision they had at Diem, which was to “really open up the financial world, transforming it into something where you can send money as easily as you send packets of data today.”

Hurley added that some of the lessons learned from the failure of the Diem project are that you need something that is truly decentralized and neutral, and that you also need a platform with a lot of liquidity. These are things that Bitcoin now seems perfect for, so it’s no coincidence that they chose LN as the platform to build their project on.

By the way, a few weeks ago, Hurley himself announced on his official X profile that Nubank has selected Lightspark to bring Bitcoin Lightning Network and Universal Money Addresses to its platform.

Cloud Bank is not only a Brazilian bank, but also the largest fintech company in Latin America, with over 80 million customers and a valuation of over $40 billion.

Lightspark’s Latest Big Deal: A More Inclusive Financial System with Bitcoin Lightning Network

Lightspark is not just an LSP, it also offers an SDK (Software Development Kit), liquidity management via routing nodes, and API services.

Their idea is to provide users, such as businesses, with a platform that simplifies the use of various Bitcoin protocols and currency exchanges, thus solving what represents the biggest obstacle to the use of these new technologies.

The idea 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 tasks. In addition, using a properly configured LSP also solves the issues of compliance of transactions with the applicable laws.

Additionally, Lightspark provides a Universal Money Address (UMA) that serves to uniquely identify user accounts and switch between currencies.

Other developments

Of course, though, it’s not just Lightspark that’s being developed on LN.

For example, Ryan Gentry of Lightning Labs recently spoke in an interview about Rusty Russell’s newly proposed Great Script Restoration Project, which aims to restore previously disabled opcodes, such as OP_CAT, to expand the possibilities for scripting on the Bitcoin network.

Perhaps the biggest technical limitation of Bitcoin today is its scripting limitations, as its layer 1 does not natively support complex smart contracts.

The solution, however, is not to distort Bitcoin’s layer 1, which does a few things but extremely well, but to allow the development of a layer 2 that can do them with the same level of security.

The goal of The Great Script Restoration is to provide developers with a more versatile toolkit that allows them to take advantage of a wide range of new features.

The problem is that when it comes to Bitcoin, it is always very difficult to get a broad consensus for protocol changes. Therefore, it will not be easy at all to get the idea across that the Great Script Restoration is useful and not dangerous.

However, the Great Restoration of Scripture could make Bitcoin more robust, and this is indeed a bullish point.

The important thing, however, is that all this clearly demonstrates how development on Bitcoin is not at all at a standstill, even if it does not directly concern layer 1 but subsequent developments.

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