Who Needs Lightning Network When You Have Loom Basechain?
TL;DR: Loom Network is adding Bitcoin support to Basechain. You can send and receive BTC on Basechain for zero fees and a confirmation time of 1 second. There is zero additional overhead for users, and developers can use the same simple interface they have been using for deploying on Basechain.
Imagine Bitcoin as the future of money. Can you see it?
We can’t. At least not in its current form. Right now Bitcoin only works as a store of value. That is because Bitcoin has some serious drawbacks, including costly transactions, very slow confirmation times, and most importantly no easy way to be used in dapps.
The Lightning Network (LN) was proposed and created to solve some of these issues, but LN comes with its own problems, namely the fee structure and poor usability.
On top of that…
The Lightning Network Is Not Suitable for Dapps
The most popular Layer 2 solution for Bitcoin has been the Lightning Network.
But the Lightning Network doesn’t work well if you’re a dapp developer. Here are some requirements developers would want in a dapp that can integrate Bitcoin (and enable Bitcoin to be the future of money):
- Easily integrate BTC payments into your dapp, so you don’t need to write too many lines of code to get it up and running.
- Easily liquidate BTC into whatever currency you use to pay for operating expenses.
- Hold any extra leftover capital in some stable form or even earn some interest.
- Have as little capital locked up in the payment system as possible.
None of this is possible with the Lightning Network. The operation of channels costs fees and locks up BTC, and your options for utilizing available capital is very limited.
The Lightning Network does not work well for developers, especially compared to Stripe (the most popular payment processor with developers).
What makes this worse is that the user experience isn’t all that great either. You want a dapp that seamlessly allows users to pay in BTC. On the Lightning Network, users are required to:
- Have a Lightning capable wallet.
- Pay fees for opening and closing channels, with transactions for those fees taking up to an hour to confirm.
- Leave the dapp in order to pay, creating massive friction in the user experience.
- Go through the same experience, even after the first purchase.
Before I continue, I want to emphasize this usability point.
Many people will sell you on the idea that as an industry we have a scalability problem. We don’t! We have a usability problem. And as we explained with Lightning Network, we mean usability for both users AND developers.
Usability Is Why Basechain Exists
Basechain is built around being pragmatic to dapp developers and to streamline the user experience as much as possible.
We realized that because Basechain functions in a completely different way from the Lighting Network (we use dPoS and support Universal Signing), we can create a vastly superior experience. Here’s how the user experience would be on Basechain:
- Map Bitcoin wallet to Basechain once (for free, with instant confirmation time and support for almost every Bitcoin wallet)
- Move BTC to Basechain with one single transaction (with no extra fees, processes, lock-up or collateral)
- Send any amount to anyone else (with no additional complications in routing, extra fees or extra processes)
- Withdraw to Bitcoin at any time (or deposit directly onto Binance Chain for instant access to one of the most liquid set of markets)
By the way, you may have noticed that there’s a second implication for Loom Basechain integrating Bitcoin: Not only will you be able to quickly send BTC to anyone else, Basechain will also function as a smart contract platform for Bitcoin.
It’s obvious to every developer we work with, that improving end user UX is the only way to grow your user base in any sustainable way. From our point of view, there are many users who prefer and would like to use BTC when they interact with dapps. That may be to lock BTC in some DeFi product for interest, to pay for game items, or to gamble on a game of chance. It would be a lie to call this unmet demand a problem of scaling Bitcoin. Rather, it is a usability problem that makes it difficult for developers and users alike.
We are going to be the mech armor suit that transfers Bitcoin into a usability monster.
The Bigger Picture
Bitcoin is still the most popular cryptocurrency. But it’s sorely lacking usability on a mass adoption scale. By integrating Bitcoin into Basechain, we want to address that issue and give both developers and users a better experience, thereby adding to the value Bitcoin can bring.
There is a great opportunity here for making Ethereum or TRON only dapps work with BTC or for new dapps to be created altogether: imagine multi-collateral stablecoins, complex DeFi instruments, or simply betting with BTC in a game. We want to enable this mingling and expansion to happen, and we see this as the only path forward to real adoption.
What will you be building on Loom?
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