San Francisco-based Lightning Labs, focused on a layered scaling solution for bitcoin, released its first mobile app on Wednesday.
According to Lightning Labs application developer Tankred Hase, roughly 2,000 users downloaded the app across both iOS and Android. Both his inbox and the inbox of his colleague, developer Valentine Wallace, were flooded with support requests.
“We got a ton of feedback,” Wallace told CoinDesk.
This bitcoin wallet is a noncustodial way – meaning users hold the keys to their assets – to send nearly instant payments worth less than roughly $1,500. The startup put a cap on transaction amounts (one-sixth of a bitcoin) while working out the kinks.
For now, the app’s Autopilot setting relies on the startup’s in-house cluster with three full nodes and is mostly useful for sending bitcoin. Users can only receive as much money as they’ve sent with the app. However, more tech-savvy users are able to use a manual function for setting up their own payment channels and connecting to their own nodes.
Hase said, there are plans to reduce reliance on Lightning Labs as soon as Bitcoin Core updates to the Neutrino protocol, which allows the app to tap into an external node that would otherwise be too “heavy” for a mobile device.
The next step on the developers’ roadmap is enabling users to easily receive payments with a process called Lightning Loop.
New revenue goals
This app launch also kicked off the startup’s first monetization strategy: A liquidity service that utilizes Lightning Loop.
Looking forward, Hase said, Lightning Labs will offer a monetized service for merchants and other power-users that frequently receive funds.
“It’s non-custodial, we don’t hold their funds, but it is a paid service because it requires us to use funds for liquidity and to allow that on the backend,” he said. “I like the Amazon Web Services analogy because it allows the other startups to focus on their business logic while Amazon takes on the infrastructure.”
Stepping back, the Lightning Labs team is also working closely with Jack Dorsey’s fintech startup Square. Dorsey, who is an investor in Lighting Labs, said in February that lightning-enabled features were eventually coming to Cash App. Yet, as Wallace pointed out, this app services a distinct function compared to Dorsey’s app.
“It makes a lot of sense for our values as a company to have a wallet that’s totally under our control,” she said, adding the Cash App bitcoin feature is primarily a custodial conduit for purchasing bitcoin.
Speaking broadly to how this new app, which admittedly has a long way to go until it can easily send and receive diverse bitcoin transaction types, plays into the startup’s long-term plan, Hase said:
Lightning Labs CEO Elizabeth Stark image via CoinDesk archives
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.