Bitcoin is unique in that there are a finite number of them: 21 million. The Lightning Network is essentially a second layer on top of the bitcoin blockchain that enables instant, scalable payments. With Lightning, you can send and receive money almost instantly, and for very low fees. That makes it ideal for micropayments, or small payments that are too expensive to make with traditional methods like credit cards or Paypal. How will this affect P2P crypto payments?
According to a Twitter post by Cash App’s Bitcoin Product Lead, the company will now allow its 44 million users to send and receive bitcoin payments on the Lightning Network. That’s a significant move for the P2P crypto payment space.
Utilizing the Lightning Network solves a big problem for everyday bitcoin usage because it speeds up transactions to near instantaneous rates with small or no fees, and solves for making bitcoin micropayments. Cash App has set a $999 limit for sending or receiving payments every seven days.
According to its website, all transactions using a QR code will default through the Lightning Network unless a user reaches their limit, or they choose to send through the traditional Bitcoin Network.
Overall, consumer interest in using crypto to make payments is low, and crypto is still primarily used as an investment vehicle. As integrations abound and transacting becomes frictionless, maybe further adoption will occur.
Overview by Ben Danner, Research Analyst at Mercator Advisory Group.
