Blogs & Articles: We Need More Apps with Lightning, not More Lightning Apps 🔗 51 weeks ago

Fun fact: the first digital camera was built in 1974 — nearly 50 years ago. Its resolution was 100x100 pixels. Ten kilopixels. It was an early alpha.

The first digital camera, which apparently recorded its data on an (analog) magnetic cassette tape (!). (Image: the George Eastman Museum)

Over the next 34 years, the technology progressed by leaps and bounds. A really good digital camera in 2007 could capture about 12.3 megapixels — an improvement of 1230x. But what was that refinement really worth? Whether 12.3 MP or 10 KP, digital cameras basically just recorded images as digital data quickly. Cameras could perform their one task better, but they could still perform only one task.

But a revolution in digital cameras began in 2007 with a device that had a measly 2MP. What made it revolutionary was that it was attached to other tech — messaging, a web browser, geotagging, and (later) a whole infrastructure of QR codes, monetization models, and special-purpose apps. That device was, of course, the 1st gen iPhone.

The iPhone and the apps built around it transformed the digital camera from a toy into an indispensable tool of modern life on par with copper cables and email addresses. The camera, with its aperture, sensor chip, and memory, is still pretty much the same as it was 50 years ago, but its connections to other technology mean that it can do so much more.

…how it’s going. Not counting much of YouTube, Tinder, countless QR codes, etc. (Image: melody)

Entire industries have sprung into existence because we connected digital cameras to other technologies. There’s a lesson here.

What Distinguishes Lightning

Lightning is a technology that facilitates fast, proportionally priced bitcoin payments. It’s programmable, peer-to-peer money. To know it is to love it. I’d call it a miracle if I hadn’t spent the last five-ish years sweating to help build it.

But as good as Lightning is, you can’t yet do much with it. Most apps that use Lightning are “just” payment apps — wallets. You can do exactly one thing with them: send smallish amounts of bitcoin quickly, cheaply, privately, and definitively to other people who use similar single-purpose tech. Like a digital camera in 2006.

This state of affairs is unsatisfying in a world of ever more peer-to-peer economic interaction. If I book an Uber, Uber might be performing a useful service of connecting me with the driver and deserve a cut. But how are the banks, credit card companies, and payment processors earning their cut? And why is that cut 1.5–3.5%?? If I listen to an album on Bandcamp, Bandcamp has performed a useful service …, but how are the banks, credit card companies, and payment processors earning their cut? If you take a position in a prediction market …, but how are …?

The mobile internet has allowed us to disintermediate a lot of our interpersonal economic interaction, so why do we still have all these payment intermediaries?

Lightning is not some dodgy, open-source hack to replicate the centralized fiat system. It’s fundamentally different in that:

• Lightning is borderless. Lightning doesn’t hack borders; it doesn’t even have to acknowledge their existence.
• Lightning is trustless. There is no banking crisis for Lightning balances because everyone can hold their own money and exercise complete sovereignty over it.
• Lightning is accessible. Add borderlessness and self-sovereignty together, and you get a system that does away with KYC friction. If everyone transacts on a peer-to-peer basis, there is no choke point for censors to exploit.
• Lightning is natively programmable. While fiat is also technically programmable, it requires third-party services (or fifth- or tenth- or nth-party services) like Plaid, Stripe, and neobrokers to make it programmable. Not only does that increase the expense, as each intermediary takes their cut, it compounds the censorship problem.

In fact, the centralization and bureaucracy of the fiat system might even be propping up the hierarchical economic structure in which a handful of too-big-to-fail banks service a relatively narrow segment of merchants who sell to billions of consumers. If everyone is their own bank, able to pay and accept payments as easily as they send text messages, then everyone is also a merchant and a consumer. Programmable, peer-to-peer money could lead to a flatter, disintermediated peer-to-peer economy.

Permission can only be denied if it is requested. Direct, peer-to-peer interaction obviates permission and equalizes market power. Don’t request permission to transact; transact. Don’t tinker with the system; supersede it.

I’m looking at you, censors and intermediaries. (Image: Lan’s soapbox)

These features — disintermediation, trustlessness, programmability — are leverage. They allow us to do qualitatively different things with our money. But what are those things, and how do we realize them?

Ideology vs. Utility

Another way to think about this is that there are two ways for bitcoin and Lightning to go mainstream: ideology and utility. Focusing on bitcoin’s identity — what it is — requires “orange-pilling” the world. It requires an ideological campaign. That might work. Most people reading this will have been convinced of bitcoin’s merits before experiencing them, and many will have been able to convince a few others.

However, many of us, if we’re honest, will also have annoyed others by preaching bitcoin at them. Missionaries aren’t always welcomed. And if we’re being really, really honest, devotion to a currency because of the community that originated it or any symbols associated with it is another legacy of fiat we’re better off without.

The other road to mainstream adoption is utility — leveraging Lightning’s strengths and our technological acumen to make it more useful. Maximizing utility doesn’t require convincing people that this or that idea is superior; it just requires making their lives better in some way and letting the free market do its thing.

Convincing people to drop the money they’ve been using their whole lives is a tough sell. By contrast, letting them switch to something new because it’s manifestly better than the old thing is a natural, smooth, non-invasive process. Most people just want to cultivate their gardens.

What makes one technology manifestly better than another is utility. It lets people do more with less hassle. But Lightning can already do P2P payments, right? So where are the next orders of utility magnitude going to come from?

Remember the iPhone.

Need Utility? Integration? Call a Developer.

The iPhone transformed the digital camera from a toy into an indispensable tool by connecting it to other technologies. That’s also Lightning’s future path. We need to facilitate Lightning’s integration into new and existing apps that rely on or would be improved by disintermediated, peer-to-peer interaction. Like Uber. Like Bandcamp. Like indie games. Like prediction markets.

We don’t need more Lightning apps. We need more apps with Lightning.

But that means our target audience is not necessarily the end users, the grandmas, the kids, the suits, and the influencers. Instead, we should focus on developers. They’re the ones maintaining existing apps and inventing new ones. Let’s give them the tools to hack their own app designs by integrating Lightning and programming transactions in the apps however they like instead of however the intermediaries let them.

The key to scaling Lightning further is connecting it to other technologies, and developers are the ones who’ll be doing the connecting. There are something like 28 million developers out there. They’re the ones with the creativity, technical acumen, and practical know-how to solve problems and add value to users’ lives by adding Lightning functionality. They have the hacker mindset required to see past fiat payment processors and see the opportunities opened by private, disintermediated, programmable money.

Inventors! Oddballs! Warriors! Revolutionaries! Developers all! My tribe! (Image: unseen64)

We’ve taken a big step towards courting developers with the Breez SDK. It’s an end-to-end, non-custodial, drop-in solution that lets a developer integrate Lightning into an app in a few hours. Perhaps best of all, they can integrate it without having to pay fees to a third-party payment processor or become a payment processor themselves. Transactions can run from one user/player/investor/shopper/peer to another without passing through the developers hands. After all, developers just want utility too. They want to do more with less hassle like everybody else.

Utility is the key to scale. Connections are the key to utility. Developers are the key to connections.

If we win the developers, we win the world.

We Need More Apps with Lightning, not More Lightning Apps was originally published in Breez Technology on Medium, where people are continuing the conversation by highlighting and responding to this story.