Payments without banks goes mainstream with Twitter

You might have heard all the news about El Salvador adopting Bitcoin as legal tender. You also are probably thinking so what? Bitcoin is just digital gold, right? It will never be used as a currency; the system can’t scale and is expensive to run. If you're still wondering what Blockchain is, I wrote this article that explains it in detail.

What you might not have heard about though is how this came about and what technology has enabled the currency revolution in El Salvador.

Time to introduce Mike Peterson.

A surfer from California USA who in 2006 ended up in a town in El Salvador called El Zonte.

?He was doing charity work in the town when an anonymous donor who had made a fortune off cryptocurrency offered $100,000 to the town on the condition that it was only in Bitcoin.?

Mike created a Bitcoin wallet and app called Bitcoin beach which was slowly adopted amongst the towns people. The problem was Bitcoin transaction were expensive and slow. Depending on the network fees, someone receiving a $20 payment would only get $13 in their pocket.?

Fast forward to today. El Salvador is accepting Bitcoin as legal tender. Many attribute this to Mike Peterson’s work. While his work surely got the attention of El Salvador’s president Nayib Bukele, the real unsung hero is actually what is called the Bitcoin Lightning network. Seeing this in action is what convinced Nayib Bukele to pass the bill in his country.?

The Bitcoin lightning network

You can read all about it here: https://lightning.network/ but I will explain it simply.

The Lightning is built on top of Bitcoin’s blockchain. It was designed with small micro payments in mind. The lightning network is known as a layer 2 payments system because it sits on top of the Bitcoin blockchain which can be thought of as the underlying 1st layer.

It uses built in smart contracts to open up direct payment channels between individuals. It’s fast, efficient and has very low transaction costs that enable very tiny micropayments.

Andreas M. Antonopoulos explains the Lightning Network in this awesome video

Mainstream adoption

On Thursday 23 September 2021, Twitter announced that their Tip Jar feature would support payment using Bitcoin via Strike’s API. Strike https://strike.me/ allows you to send and receive payments in Bitcoin. It uses the Lightning network we just spoke about.?

Once this feature rolls out, any Twitter user can send money to another Twitter user using Bitcoin. The payments is immediate, fast and free.

Here comes the so what…

No Bank was involved.

No Swift payments network..

No Visa payments processing fee…

No Currency conversion and exchange rate fee….

See it in action…?

Now Twitter isn't needed to enable this kind of payment. The Strike payments platform is doing the hard work and any two users with Strike can pay each other today. How many of you reading this even knew what Strike was? I am guessing very few.

What this does is bring this Lightning network enabled payment capability to the the masses; Twitter has over 350 million users globally.

(As always drop a comment below if you found this interesting...)