Which popular projects in the Lightning Network field have secured large-scale financing?

Written by: Maxlion, ODAILY

As early as 2010, a programmer paid 10,000 BTC for two pizzas, and in 2018, this programmer used the Lightning Network to buy two pizzas again, paying 0.00649 BTC. This story is well-known in the crypto community and also serves as evidence of the development of the Lightning Network. As "L2 for Bitcoin," the Lightning Network has consistently demonstrated superior performance in payment scenarios. In the past six months, with Lightning Labs raising $70 million (in April this year) and Strike, based on the Lightning Network, raising $80 million (on September 27), the Lightning Network has once again attracted attention.

What is the Lightning Network? How does it work? What applications are worth experiencing? The following text will answer these questions one by one.

What is the Lightning Network?

The Lightning Network is a second-layer payment protocol on Bitcoin, designed to enable fast transactions between participating nodes and proposed as a solution to Bitcoin's scalability issues. This solution allows for small payments of cryptocurrency through a peer-to-peer system via a bidirectional payment channel network, without the need to entrust funds.

In simple terms, the Lightning Network supports direct, small, and fast transactions between two users.

Schematic diagram of the channel between Node A and Node Q

In terms of operation, when one user initiates a transaction to another user, the Lightning Network first opens a channel between the two parties, where they can submit funds; then, they can use this channel to instantly send BTC, with transfer fees being almost zero, without broadcasting each transaction to the underlying Bitcoin blockchain. Either party can settle on the Bitcoin blockchain and close the channel at any time.

In terms of performance, as of September 27, 2022, according to 1ml.com, the BTC capacity in the Lightning Network exceeds 4,908 BTC; regarding TPS data, due to privacy protection, there is no specific TPS data, but the theoretical TPS is about 1 million; currently, the number of BTC nodes participating in the Lightning Network has reached 17,829, with the number of channels reaching 86,334.

In addition, the average settlement time in the Lightning Network is less than one minute, mostly measured in milliseconds. In practical tests, users' payment experiences are comparable to WeChat Pay and Alipay, whereas the average confirmation time on the Bitcoin blockchain is every ten minutes. According to data from dollarcostbitcoin.com, the transaction fee on the Lightning Network is about $0.0001. Overall, the payment experience of the Lightning Network is on par with centralized electronic payments, especially advantageous in cross-border transfers.

Next, we will introduce three classic or popular projects in the Lightning Network field.

Zap------Lightning Network Wallet

Zap is one of the earliest wallets launched on the Bitcoin Lightning Network, allowing users to transfer funds to other users on the Lightning Network.

First, users need to visit the official website and download the client. After downloading the client, follow the general process to create a wallet.

After selecting the folder for data storage, users will begin syncing blockchain data, which takes about 7 minutes. Once the data synchronization is complete, the wallet page will appear as shown below:

In addition to common payment functions, users can click the request button in the upper right corner to set the amount they wish to receive and then generate a payment QR code. Currently, options for setting payment units, notes, and invoices are supported.

After completing the settings, users can use the generated QR code for receiving payments. The generated image is shown below,

Strike------Payment Tool Based on the Lightning Network

Strike is a payment tool based on the Lightning Network, allowing users to transfer payments, receive, or purchase Bitcoin instantly. Strike's recent major news was completing an $80 million Series B funding round on September 27, led by Ten31. Its predecessor was Zap, which launched the Strike product last year.

Currently, Strike is primarily targeting the U.S. market, and its application is available only in the U.S. (excluding Hawaii, New York, and South Dakota), El Salvador, and Argentina. Users cannot create accounts if their IP is outside these regions.

Strike is also collaborating with several companies with large user bases, such as Amazon, Nike, Uber, and Shopify (a platform that helps merchants build e-commerce), to conduct cashback activities. Users can receive cashback when using Strike for payments, expanding Strike's usage.

In addition to collaborating with multiple companies for cashback activities, Strike is also launching a credit card.

In summary, Strike does not position itself as a Web3 product but rather as a payment tool that helps merchants and users conduct faster, cheaper, and more versatile payment activities.

Bitrefill------E-commerce Platform on the Lightning Network

Bitrefill is an e-commerce platform built on the Lightning Network that supports BTC payments. After registering an account on Bitrefill, users can purchase gift cards and recharge mobile phone credits in over 170 countries/regions.

The platform recommends different promotional activities based on the region set by the user in the upper right corner. When users complete their product selection and proceed to payment, they can choose to pay with digital currency, and delivery is usually instant. If the payment tool used is Strike, as mentioned earlier, users will also receive a 10% cashback. The settlement page is shown below: