Elizabeth Stark stands out in the world of digital currencies. The 30-something entrepreneur feels at home among the tribal cryptocurrency subcultures, but equally at mainstream institutions like her alma mater, Harvard Law School. The ability to span these two worlds makes it suitable for solving Bitcoin’s most chronic problem – a slow network that takes at least 10 minutes to process a transaction.
Stark is the CEO of Lightning Labs, a company leading the push to create a new layer on top of the Bitcoin network, called the Lightning network, that can handle multiple transactions in seconds. On Wednesday, Lightning Labs revealed that it had raised a $ 10 million Series A funding round led by Craft Ventures, and launched its first commercial product to help businesses utilize its high-speed network.
The news comes as doubts persist as to whether Bitcoin can be a useful currency in the real world. Since its inception 10 years ago, people have raised concerns about network capacity, involving computers from around the world contributing to a shared public ledger that creates a record of Bitcoin transfers and payments.
Unfortunately for Bitcoin fans, even in the best of cases, it takes around 10 minutes for a transaction to become part of the shared ledger. And when Bitcoin trading increases, like in late 2017, the network gets bogged down and the process can take a day or more and involve high fees. Attempts to scale the core network have failed, so the solution offered by Lightning Labs, a series of side “channels” built on top of Bitcoin, promises a means for the cryptocurrency.
Stark points out that web designers, three decades ago, included an error code called 402 (similar to the better-known 404 error for “page not found”) for “Payment required,” evidence that the Internet was always designed to have a monetary system. . . .
In practice, this involves Lightning Labs building and selling software infrastructure to improve Bitcoin transfers, while other startups develop applications to make the network more user-friendly.
But while there is considerable enthusiasm for Lightning Labs among the crypto suite, it is far from clear if the Lightning network, or even Bitcoin itself, is gaining traction amid a crowded digital payment space that consumers can use. easily with Venmo or Apple Pay cards to move money.
“The narrative of Bitcoin or another cryptocurrency as ‘digital gold’ has overtaken the idea of cryptocurrencies as a conventional payment mechanism,” says CB Insights analyst Alex Kern, adding that tax and regulatory issues have also prevented Bitcoin from become everyday money. .
However, Stark is optimistic that Lightning will help more companies use crypto for payments. She is targeting growing adoption in the gaming community and with a work-for-hire service, similar to Amazon’s Mechanical Turk, that allows users to earn small amounts of crypto by performing tasks for others.
The new funding injection of $ 10 million, Stark says, will help Lightning Labs, which has 16 employees, develop its business side and create more products. Meanwhile, the company is creating quite a stir in the crypto world, but it remains to be seen when, if ever, Lightning will bring Bitcoin to the mainstream.
“There is great potential to integrate Lightning into online micropayments,” says Eric Turner, research director at cryptanalysis firm Messari, adding: “It is important. remember that although the technology is widely discussed in space, it is still a few years from being a finished product. “
