“Fix the money, fix the world”: Crypto company launches technology that sends money around the world… via Bitcoin network

Bitcoin-focused start-up Lightning Labs has raised $70 million in a Series B funding round. This investment is to fund the development of the Taro protocol, a tool that allows users to send money almost instantly and at low cost around the world via the Bitcoin network. The investment round was led by Valor Equity Partners, and saw Robinhood CEO Vlad Tenev make a financial contribution, among others.

Although Bitcoin makes $50 billion daily, its public network can only process seven transactions per second. Compare that to the payment protocol of 24,000 transactions per second from credit card giant Visa, and you know where the shoe pinches for the world’s largest crypto network.

Assets other than Bitcoin

However, since 2016, Lightning Labs has been working on a solution to Bitcoin’s scaling problem. The company is developing features for the Lightning Network, a layer-2 scaling solution that enables instant, low-cost transactions with Bitcoin, but without using Bitcoin’s time-consuming verification process for every transaction on its blockchain.

Lightning Labs has already developed several products, including the Lightning Pool, dedicated to liquidity for transactions in Bitcoin. Now there’s Taro, a protocol that the company hopes will open up the Lightning Network to assets other than Bitcoin, including stablecoins and fiat currencies. “That’s very important,” said Lighning Labs CEO Elizabeth Stark Forbes“because there is potential to transfer all the world’s currencies via Bitcoin over the Lightning Network to let to go”.

Stark believes Taro will promote Bitcoin adoption as it will allow unbanked people in developing countries to send and receive money in the form of stablecoins. These are cryptocurrencies whose price is linked to the exchange rate of fiat currencies, such as the euro or the dollar. “There’s the concept of ‘fix money, fix the world,’ and that’s, I think, part of what really attracts me to what we do,” Stark said in an interview with crypto news site. Decrypt

Bitcoin’s Taproot upgrade, which went live last November, has made the Taro protocol technically possible.

Transaction highway

Bitcoin’s Lightning Network is currently being used by the country of El Salvador, Bitcoin payment company Strike, and crypto exchange Kraken, to name just a few major users. Now anyone who wants to transfer stablecoins will be able to do so via the Lightning Network.

Recently, stablecoins have proven to be a bit of a stumbling block for American legislators. For example, the company behind the dollar-pegged digital currency Tether has regularly been discredited since May last year. Tether would use a huge amount of commercial paper to prop up the value of its stablecoins. And just last week, two US lawmakers passed a bill requiring stablecoins to be backed by both US dollars and government bonds.

Stark said possible regulations for stablecoins would not affect the Bitcoin Lightning Network, as it does not issue stablecoins, but merely provides a transaction highway where they can be exchanged. If there is regulation, Stark said, “publishers will be able to comply.”

“Stablecoins are not going away. I think its adoption will only increase,” she added.

(ns)

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