A former academic, Elizabeth Stark likes to play devil's advocate. Take, for instance, her appearance at the Crypto Springs conference in October 2018.
It's a sunny morning in Palm Springs, California, and a handful of attendees are lounging by the pool; onstage, however, Stark is busy describing some of the darker potential scenarios for the cryptocurrency industry, ones in which it could fall short of its potential.
But if the words of warning aren't drawing a response, it's perhaps because the price of bitcoin is still north of $6,000, and some are optimistic that the so-called "crypto winter" will soon be over, evaporated by an end-of-year upswell in institutional money entering the industry.
It's not a sentiment shared by Stark, though, who warns attendees that legacy financial players could take stronger measures to impede the sector's growth. "When you change how money is created and valued, there is going to be major pushback," Stark says.
Later, Stark draws applause when she castigates the previous year's explosion of initial coin offerings (ICOs), and the sometimes shady startups that used them as a means of securing fundraising from a market that was suddenly full of unsophisticated buyers.
"I’m all for experimentation, but I’m not for experimentation if it means that retail investors are going to get sluiced," she says. "Ninety-five percent of the coins that we have right now will probably fail."
The stance has come to dominate more and more of Stark's talks of late, that innovation can and must be balanced with steps that avoid consumer harm, and it's one that's taking on increasing relevance as the crypto market cools and the industry attempts to take stock of why billions in consumer money came in 2017, only to quickly retreat.
“If you really believe in decentralization then why are you creating all these centralized services?" she continues.
Referring to the way crypto exchanges and certain wallet providers control the private keys to their customers' wallets, thus undermining the value proposition of personal financial sovereignty, she adds: "We need to get to a world where people can hold their own keys … have this autonomy.”
Yet, as frank and sobering as her talk might have been, Stark has the clout to not only call for change in the industry, but deliver it. After years of quiet building at her startup, Lightning Labs, 2018 has been a breakout year for both Stark and her company.
In fact, Stark's accomplishments this past year dwarfed those of most other entrepreneurs, as her decision to roll up her sleeves in 2015 and take the helm of an open-source project many saw as the best chance to massively scale bitcoin (but that perhaps had little business value) began to bear serious fruit.
Rallying the troops
Instead, it’s become a functioning, if niche, payments system; a hotbed of software development; and a beacon of hope for those who believe in bitcoin’s potential as an everyday currency. All in the space of a year.
A law school graduate, Stark doesn’t code much. But there are many who credit the Lighting Labs CEO for much of the remarkable progress lightning has made.
"She helped get everyone to actually make stuff," said Tadge Dryja, who co-wrote the 2016 lightning white paper with Joseph Poon. "Her thing is not only identifying a super-cool project, but then saying, 'We should actually build this.'"
As such, Stark is often described as a kind of warrior queen, who now commands an army of elite developers.
"Her general conviction and ability to organize and arm the troops and to aim the cannon, then allow these really talented people to shoot, is really rare in this space," said Jack Mallers, who developed the Zap bitcoin wallet using the lightning network's open-source code.
It was Stark, after all, who recruited Olaoluwa Osuntokun, a Nigerian-American prodigy, to work full-time in the cryptocurrency industry. The former Google engineering intern known as "Lalou," now Lightning Labs’ CTO and co-founder, has become one of bitcoin’s most prolific developers, taking over the work Dryja and Poon started on the layered scaling solution. (Both have since departed, citing differences within the team).
More broadly, Stark is also widely credited for turning her friend Jack Dorsey, the CEO of Twitter and co-founder of Square, into a lightning believer. Since Dorsey fell into Stark’s orbit, the Square payments app has become one of the most popular ways for U.S. retail investors to acquire bitcoin. He also invested personally in Lightning Labs, the company Stark co-founded that develops the open-source Lightning Network Daemon (LND) protocol.
But perhaps the clearest proof of her influence can be seen in the blossoming of lightning itself during a brutal year for cryptocurrency prices and a period of overall retrenchment for blockchain companies.
The number of nodes on the nascent network swelled from a few dozen in early January to more than 1,900 in mid-December, according to BitcoinVisuals.com. (1ml.com gives an even higher estimate, including some that aren’t currently active, with more than 4,500 lightning nodes.)
Lightning now has the capacity to process about $2 million worth of crypto transactions, based on the balances held in its more than 13,000 payment channels. While that may seem small, it’s an auspicious start considering the beta version of LND was only released in mid-March. Underscoring the health of the young ecosystem, there are multiple implementations of the software, of which LND is only one.
"Lightning is a movement," Stark told CoinDesk recently, recalling a conversation with a bitcoin fan who first coined this phrase. "We've spent the past year building this movement and it's working."
From law school to lightning
It's been a long time since Stark, an affable vegan who hardly fits the bitcoin stereotype of a socially awkward introvert, started her journey to become an unlikely heroine in bitcoin’s origin story.
"As a teenager, [I] was an internet geek who liked electronic music," Stark told CoinDesk. "So basically I'm the same person today."
Growing up in the New York suburbs, she said, she knew her calling was to build new technology. "As a teenager, I interned at startups in New York City," she said. "Law school was actually an interesting means to study and research the internet."
Stark was busy honing debate skills and graduating from Harvard Law School in 2008, the year Satoshi Nakamoto published the bitcoin white paper. After law school Stark went into academia, teaching human rights and computer science courses at universities like Yale, Stanford and Harvard.
It was at Stanford, in 2010, where she first heard about bitcoin from a teaching assistant.
By the time she met with Dryja in 2015, developers had started to theorize what would later become the lightning network, which was then little more than a concept on slide decks and whiteboards. Yet, Stark was ready to lead a startup.
"From the beginning she was clear, she wanted to be the CEO," Dryja recalled. "She’d seen a lot of ideas that never got anywhere, not because the idea was bad but because there’s a big difference between an idea ... and getting it so that millions of people can use it."
Dryja, who co-founded Lightning Labs with Stark then left the company in 2016, credited his former colleague for prioritizing quality over quantity. Despite being a rookie businesswoman, she lined up prominent investors like Charlie Lee, the creator of litecoin, former PayPal COO David Sacks, and Dorsey. But Stark raised a modest $2.5 million from these investors and avoided the lucrative token sales that were then becoming fashionable.
"Even in 2016, you could have raised a ton of money and gotten a fancy office, but she didn’t want to," Dryja said.
Stark said she's driven by a desire to create "significant technology that will have effects on the 10-year horizon and beyond." In her mind, lightning is a key part of ensuring bitcoin's longevity.
"This is a marathon, not a sprint," she said.
Perhaps thanks to her legal background, Stark has the uncanny ability to disagree without being combative and guide decisions without barking orders.
Her presence is unassuming, yet irresistible. The raven-haired CEO is often spotted beside Bitcoin Core developer Matt Corallo at meetups with her omnipresent smile and cypherpunk black wardrobe.
"She’s very socially equipped in terms of networking, something that I don't do well and don't enjoy," Mallers said. "Writing the code isn’t the hard part. It’s aligning the direction, limiting the scope, organizing."
No matter where you go in the tech industry, someone in the room probably considers Stark a friend and wants to hear what the level-headed extrovert has to say. This nonchalant charm makes her an anomaly in a field teeming with bombastic personalities.
Although there may be some professional rivalry with bitcoin-focused startups like Blockstream, Dryja said Stark’s approach is to listen to everyone and observe how users interact with a protocol instead of "trying to dictate what people do with it."
Another sign of her personality: no matter how busy she gets, Stark is generally responsive to chats in the LND Slack group, where developers and fans around the world collaborate, and which now has more than 2,870 members.
"I think it speaks to who she is as a person that she is fostering this community. And it speaks to her savvy as a business owner," Mallers said.
Referring to Lightning Labs, he added, "all their software is open source and they are very grounded, sticking to their original vision."
Diversity and mentorship
Another way that Stark distinguishes herself is by deliberately creating opportunities for minorities to contribute to an industry predominantly led by white men.
Stark co-organized the Crypto Springs conference in October, where more than half of the speakers were women, and scholarships for women to attend Bitcoin Core contributor Jimmy Song's programming bootcamp.
Mir Liponi, an Italian vlogger and co-founder of Blockchainlab, said meeting Stark at a Consensus conference in 2015 inspired her decision to take a more active role in Italy’s bitcoin community.
"The fact that she was so young and respected as a CEO and as a woman was something almost new to me," Liponi told CoinDesk. "One of the greatest contributions Elizabeth [made to] bitcoin is her constant work and ability to connect experts, projects, people."
It was Stark who helped Liponi arrange bitcoin hackathons in Milan, with people working on a variety of distinct solutions related to lightning. In part, these meetings helped set the ground work for the lightning interoperability standard called Bolt, which allows lightning-enabled bitcoin nodes to route transactions.
"If you want to design this for people to actually, use, we can't just design it for ourselves," Dryja said, adding Stark is one of the leading figures getting "all different kinds of people" involved with building up the bitcoin ecosystem.
Like many young developers in the space, Mallers credits Stark with mentoring him as he went from obscure hobbyist to internet-celebrity entrepreneur.
Speaking broadly to how her mentorship encourages programmers across the ecosystem to connect and ship complementary code, he added: "I give that credit to Elizabeth."
Stepping back, to fully grasp Stark's work to bitcoin, it's important to remember that the lightning technology was conceived, and Lightning Labs founded, in the midst of a long-running and contentious debate within the bitcoin community over how best to scale the network.
Over the years, as bitcoin's network volume increased, rising transaction fees and slowing confirmation times had cast doubt on the currency's suitability for use cases that were touted early on, such as micropayments for web content or prosaic retail purchases (the proverbial cup of coffee).
While few in the community questioned the so-called digital gold's ability to serve as a store of value, its utility as a means of exchange was now at issue.
One camp, led by CEOs of venture capital-funded startups, wanted to quickly boost the network's capacity by increasing the size of transaction blocks that are added to the ledger every 10 minutes or so.
The other camp, represented by developers and hard-core users like Stark, resisted such proposals, arguing, among other things, that a hastily implemented change to the software would present a security risk.
(Stark was often outspoken during these debates about how important she believes it is to prioritize security as one of bitcoin’s core principles.)
Lightning, as conceived by Dryja and Poon, offered an alternative. Small payments would be handled off the blockchain, through a mechanism called payment channels. Users could send bitcoin back and forth to each other through these channels, and the blockchain would be reserved for final settlement.
Still, the scaling debate raged on. After a game of chicken, in which the big-block camp tried to push through a software update that might have split the network into two competing currencies, the controversial plan was called off at the eleventh hour in November 2017.
The slow-and-steady camp had prevailed, and the stage was set for layer-two solutions like lighting to flourish. Four months later, in March 2018, Lightning Labs released the beta version of LND.
Today, Stark said there are now hundreds of developers making Lightning apps and contributing to the network's open source infrastructure. Meanwhile, the number of channels has increased 16-fold over the past year.
Regardless of the so-called crypto winter, Stark's 11-person company shows no signs of slowing down.
"If anything, the calming of the hype and frenzy helps us because there are fewer distractions and it's a better time to keep on building," Stark said. "There's a lot left to do, but this year has very much exceeded my expectations with the speed of growth and adoption."
This further distinguishes Stark from many other CEOs of her ilk: She is patient. Speaking to what sets Lightning Labs and its vivacious leader apart from other crypto startups, Mallers concluded:
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