The Business Case For Implementing Bitcoin’s Lightning Network

This is an sentiment editorial by Matt Maraia, a CPA focused connected however changes to accounting regulations interaction the Bitcoin community.

Today, companies walk egregious amounts of wealth connected recognition paper fees erstwhile processing lawsuit payments, yet cutting into margins that are wide scrutinized by investors and absorption alike.

But the Lightning Network presents a caller outgo solution with the quality to process instantaneous payments (using Bitcoin) for virtually nary fees. It boasts equivalent decentralized safeguards to the Bitcoin network, yet utilizing Bitcoin’s blockchain, which has not been hacked since its inception successful 2009. While uncertainty among the wide nationalist astir bitcoin manifests itself successful the asset’s terms volatility, this innovative exertion built connected apical of “Bitcoin rails” poses a unsocial accidental for CEOs and CFOs to amended profitability.

In fact, you tin beryllium anti-Bitcoin and inactive beryllium capable to extract the advantages of the Lightning Network into your company’s outgo processes, avoiding the issues of bitcoin terms variability.

Here are immoderate of the biggest advantages of adopting the Lightning Network for businesses:

Improving Margins, Reducing Fees

With wide layoffs circulating the market, investors and managers understandably proceed to scrutinize margins — each dollar matters and tin spell catastrophe without due readying and foresight.

The Lightning Network helps to alleviate these pressures by mode of minimal transaction fees. On average, payments made via recognition paper magnitude to about 3% successful fees owed to intermediary fiscal institutions. The Lightning Network opens up the anticipation to process payments astatine a fraction of the cost by utilizing micropayment channels. While it is improbable that an full lawsuit basal volition instantly transact done the Lightning Network, adjacent transitioning 25% of recognition paper payments could importantly amended margins.

Benefitting From Consistent Innovation

Without delving into the superfluous details of however Lightning operates down the scenes, the innovations materializing successful the abstraction stay frequent.

For example, IBEX Pay operates arsenic a web exertion work that allows merchants to make an invoice connected demand, make a QR codification to beryllium scanned by the purchaser with immoderate Lightning wallet and process outgo via Lightning instantaneously. Merchants tin opt to person outgo based connected the user-designated ratio of BTC to USD.

For companies with point-of-sale (PoS) terminals, Strike is processing Lightning Network compatibility for galore of those portion offering akin benefits to the IBEX Pay level successful some ratio and outgo effectiveness. And astir of these services bash not necessitate monthly subscription fees.

Instant Settlement

Another payment of utilizing the Lightning Network is simply a near-immediate colony of funds. No longer are companies required to hold 2 to 3 concern days for ACH/wire payments to settee to entree superior via “fiat rails.” Intermediaries are removed with the usage of the Lightning Network, permitting accelerated entree to superior portion limiting counterparty risk.

A Built-In Customer Base

Although lawsuit bases are highly babelike connected the goods oregon services offered by a company, determination is simply a ample contingent of Bitcoin supporters who similar and often question retired vendors that run straight oregon indirectly wrong the Bitcoin environment.

Many Bitcoin advocates usage websites specified arsenic btcmap.org and satmap.app to find businesses that judge bitcoin. Given that the Lightning Network is simply a furniture built connected apical of the Bitcoin network, adopting it tin supply you with an ever-growing, built-in lawsuit basal that is bare to lend to and stock the successes of businesses operating nether the Bitcoin umbrella.

Limitations And Risks

Still, the comparative infancy of the Lightning Network means determination are imaginable limitations and risks.

For instance, IBEX Pay currently offers a maximum $2,500 transaction size. Additionally, and arsenic with immoderate caller technology, portion the web is gaining traction, determination are inactive imaginable risks with bugs and different vulnerabilities. Recent traction successful popularity has helped to lessen concerns implicit this impervious of concept, but without decades of information points to thin on, determination is nary warrant issues volition not emerge. Lastly, a existent deficiency of regulatory clarity successful the integer plus realm could perchance pb to much questions later.

With each that said, the Lightning Network provides companies with a competitory vantage from a financial, operational and technological standpoint, though determination are immoderate concerns owed to the comparative infancy of the merchandise successful summation to existing limitations successful existent solutions. However, alternatively than lasting by and suffering done the oncoming borderline pressures that proceed to infiltrate the economy, it is worthwhile to instrumentality enactment and adapt.

My proposal for concern owners retired determination is to proceedings tally implementing this solution for astatine slightest a tiny conception of your concern and to physique retired capable of a illustration size to comparison to existent outgo processes. What’s the worst-case script here? You are not reaping the benefits outlined herein, but you are without collateral harm to your business. The best? You are a archetypal mover successful a exertion that aims to interrupt the outgo processing space, coupled with expanding margins and gaining quicker entree to lawsuit payments.

The determination is yours.

This is simply a impermanent station by Matt Maraia. Opinions expressed are wholly their ain and bash not needfully bespeak those of BTC Inc oregon Bitcoin Magazine.