Adopting new technologies can be challenging, and using the Bitcoin Lightning Network is no different. At RADAR, we built the ION App Store to make this technology more accessible to users and developers. This article will articulate the benefits of the Lightning Network, how the ION App Store can help users get started, and some of the exciting use cases we’ve seen so far.
Why the Lightning Network?
The Lightning Network is a payment network that is based on the underlying security of the Bitcoin blockchain, but a Lightning Network transaction is both much faster and much cheaper compared to an on-chain Bitcoin transaction. And compared to credit cards, the transaction fees that merchants pay to accept money are significantly lower on the Lightning Network. This means making very small payments (micropayments) and a large number of payments is now more economical than ever before.
Yet despite the cutting-edge technology, the Lightning Network posed two problems for us as users. First, we couldn’t keep up with new applications being built and old ones shutting down, despite our best efforts to canvas forums, tweets, and message boards. Second, we had to open a channel to every single app if we wanted reliable payments. This was like obtaining a separate debit card for every single shop, website or person we wanted to pay.
So we built the ION App Store to make it simple for users to discover and connect to Lightning Network applications. We’ve tested each application and built an interface for users to discover on their own. By simply opening a trustless channel with the ION App Store, users can send instant payments to every application. We want to make it simple to explore applications of the Lightning Network across every use case. The ION App Store includes a variety of categories and opportunities to use the Lightning Network, and we’ve included a few prime examples here.
Explore e-commerce options with Bitrefill
As it’s a payment network, one obvious use of the Lightning Network is e-commerce. Bitrefill allows users to purchase an impressive array of gift cards, from Spotify to Amazon. Instead of entering your credit or debit card details, you scan a Lightning Invoice with your Lightning wallet to complete the payment. The Lightning Network allows instant, digital transactions without relying on a bank or access to a credit card. Another valuable feature of paying with the Lightning Network is privacy; users don’t have to share any personal information with a bank or merchant. With Lightning Network payments and Bitrefill, any person with a Lightning wallet can instantly purchase access to products and services across the globe.
For businesses, the Lightning Network means more certainty in transactions and lower fees. As Lightning Network payments don’t involve a line of credit or a banking intermediary, there can be no false cancellation of the payment (if the payment is incorrectly suspected of being fraudulent) or chargebacks to the merchant from a fraudulent payment. In traditional e-commerce these are a common source of inconvenience for users and cost for merchants, alongside fees charged by banks and credit card providers for each transaction.
Test drive games with Satoshi’s Games
In-game payments are not a new concept, but the Lightning Network offers new possibilities for game developers to monetize. At the most basic level, this takes the form of an arcade experience: users pay to play each time. Satoshi’s Games adopts this approach and takes it one step further, leveraging the ability to payout via Lightning Network invoice so that users can win sats depending on how well they perform in the game. In a physical arcade, users can win tickets that are exchangeable only within that specific arcade. Compare that to being paid in a currency that is not only recognized outside of that building, but anywhere in the world.
There is huge scope for developments in in-game payments, and they’re not limited to purchasing a digital asset (such as custom weapons or armor). Need to purchase a digital asset such as a custom weapon, cast a spell, or change the digital weather? You could make a payment for that. Typically these interactions are only feasible by creating in-game credits using a traditional trust model. With the Lightning Network, users don’t have to tie up their money in the currency of a specific game, or trust that in-game credits will still be available every time they log in. It’s all controlled from a user’s own Lightning wallet.
Physical computing and beyond with Pollo Feed
While e-commerce and games are digital by nature, we’ve seen a category of apps emerge that straddles the digital and physical world. Known as “physical computing,” it is a digital interaction that causes a physical event. Think vending machines or ordering an Uber.
There are two key ways the Lightning Network expands this: functionally small payments and broader digital reach. Pollo Feed is an application that lets you feed real chickens on a live video stream via Lightning, and it exemplifies both these characteristics. If the app used a credit card payment via Stripe instead of the Lightning Network, the entire payment would be eaten up by fees. (Ever wondered why convenience stores have a credit card minimum purchase? That’s why.) And traditional physical computing interactions are limited by physical proximity and currency; you need coins for your vending machine, and you need the vending machine to be close by to use it. By contrast, you can feed chickens on Pollo Feed from anywhere in the world for a tiny, near-instant, nearly fee-free payment.
We’ve only just begun to see the impact of native digital payments in this space, which promises to grow as the number of smart devices increases.
How to get started on the ION App Store
Then check out other great Lightning-enabled applications on the ION App Store, including an anonymous SMS service, Lightning Bitcoin job board, and app to create your own content paywall. We’ll continue to add applications every week (follow our Feature Friday announcements on Twitter) and stay tuned for new categories coming soon, including wallets, browser extensions, and developer tools.