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Cash App Set To Bring Bitcoin Lightning Network To Its 36 Million Users

The Lightning Network has been integrated into Cash App, a peer-to-peer payment service operated by Block, previously Square Inc.

The feature allows transactions between parties that aren’t connected to the blockchain network. It was created to address the scalability issues with the flagship cryptocurrency.

Bitcoin Lightning Important For Speedy Transactions

Block (previously Square), a fintech firm co-founded by former Twitter CEO Jack Dorsey, owns Cash App. The news of the BTC L2 integration was announced as a notification on the official Cash App app, which Crypto Twitter picked up:

The news are real! @CashApp added #Bitcoin Lightning ⚡Network 🚀 pic.twitter.com/zbbdqcx0dC

— Yegor Petrov 🔑⚡ (@yeg0rpetrov) January 11, 2022

With a throughput of five transactions per second (TPS) and an average transaction price of $1.79, Bitcoin falls far short of the mark in terms of payments.

$1.79 is a bargain compared to the highs of April 2021, when transactions cost an average of $62.78. Nonetheless, any transaction costing more than a few cents is impracticable as a widely accepted payment method.

With its layer-2 solution, the Lightning Network provides tremendous scalability and cheap transaction costs.

It operates by diverting transactions from the main chain and placing them into peer-to-peer “payment channels” between two parties, such as a buyer and a coffee shop. Once the channel is created, it can handle an endless number of transactions in real-time.

The payer must first lock Bitcoin into the network to open a payment channel. After the recipient has been locked, they can invoice amounts based on the cost of the items and services sold.

Fees are a mix of routing fees for sending payment information between Lightning Nodes and Bitcoin transaction fees for opening and closing channels. These, however, are still far less than direct main chain transactions.

In November 2021, the Lightning Network’s total USD value locked (TVL) peaked at $216 million. Since that time, the TVL has reduced.

TVL locked in the lightning network. Source: DeFiPulse

Block CEO Jack Dorsey, who was previously the CEO of Twitter, has long advocated for the tool’s inclusion. “It’s not a ‘if,’ it’s more of a ‘when,’” he told podcaster Stephan Livera in 2019 that they would combine the scaling technology with payments provider Block’s mobile app.

“We don’t think it stops at [bitcoin] buying and selling,” he remarked.

Steve Moser, editor-in-chief of TheTapeDrive and a contributor to MacRumors, tweeted in November that Cash App “is working on Lightning network integration.” Moser said he discovered proof that Cash App was preparing to implement the additional features in December.

Square’s Cash app is working on Lightning network integration. $SQ #Bitcoin #cashapp #LightningNetwork pic.twitter.com/AzMIfU2xex

— Steve Moser (@SteveMoser) November 15, 2021

According to the most recent data from Business of Apps, Cash App had over 36 million users in the United States and the United Kingdom.

BTC/USD trades below $%k. Source: TradingView

Related article | Number Of Bitcoin Lightning Network Nodes Jumps 23% In Three Months

Cash App Is Not The Only One Adding The Feature

Belo App, based in Argentina, said on Monday that it has partnered with infrastructure provider OpenNode to enable Lightning Network access to its users.

Julie Landrum, OpenNode’s Head of Growth, stated that the deal allows millions of people in Latin America to conduct quick Bitcoin transactions.

Last month, ConsenSys, the Ethereum blockchain software startup, announced a solution that makes blockchain technology scalable on the Ethereum Mainnet or for private use, in conjunction with Mastercard.

Related article | Lightning Speed: Taproot And The Lightning Network, A Match Made In Heaven

Featured image from The Block, chart from TradingView.com, and DeFiPulse

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Cash App Launches Bitcoin and Stock Gifting Feature For The Holidays

Cash App has recently launched a new feature that would allow users to gift friends and family stock and bitcoin. The app has taken gifting to another level with this new feature that will literally allow users to gift crypto to their loved ones with this feature. The gifting feature works the same way sending money in the app does but this time around, users will be able to gift as little as $1 in stock or crypto.

Gifting Bitcoin With Cash App

The payments app had taken to Twitter to announce the new feature roll-out. It explained that users will be able to gift crypto and stock to their loved ones regardless of whether or not they owned any of it themselves. It would be akin to sending cash on the app and just as easy. The feature was to enable users to help their loved ones start their investing journey by gifting them their first stock or bitcoin.

Related Reading | Millennial Millionaires Are The Most Bullish On Crypto, Survey Finds

“With Cash App, you can now send as little as $1 in stock or bitcoin. It’s as easy as sending cash, and you don’t need to own stock or bitcoin to gift it. So this holiday season, forget the scented candles or novelty beach towel, and help your cousin start investing.”

Cash App’s new gifting feature will only be available to users in the United States. The payments app is owned by Block, formerly known as Square, which is run by ex-CEO of Twitter, Jack Dorsey. With the announcement of the rebrand, Dorsey had explained that the brand’s mission was to help the seller community, by building tools that give access to the economy.

BTC continues downtrend | Source: BTCUSD on TradingView.com
Other Companies Jumping In

Cash App is not the first to announce a bitcoin and stock gifting option to its users. Crypto exchange Coinbase had rolled out a similar feature which is currently live where users are able to gift cryptocurrencies to their family and friends. The crypto is gifted using a digital card picked out by the user that is inspired by NFT art.

Related Reading | Struggling Prices Beats Bitcoin Expectations Down From $100K To $50K

Trading app Robinhood had also recently rolled out a gifting feature. Users of the app are able to gift up to seven cryptocurrencies to their loved ones including bitcoin and ethereum, of as low as $1. This is to tap into its younger demographic of users who are more likely to gift crypto to their friends and family instead of conventional holiday gifts.

Cash App is however the first peer-to-peer payments service to offer crypto and stock gifting service to its customers. All other brands are trading platforms where users are able to trade cryptocurrencies and stocks directly. Users can choose to send crypto or bitcoin using their existing Cash App balances or using a debit card.

Featured image from Yahoo Finance, chart from TradingView.com

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Will Bisq Be Part Of Jack Dorsey’s Bitcoin DEX Project? Here’s The 411

As NewsBTC informed, Square will develop a Bitcoin-only Decentralized Exchange. However, will they work in conjunction with Bisq, the “peer-to-peer trading network”? Jack Dorsey seemed to confirm that both organizations are going to start talking at the very least. Why does this matter? What makes Bisq special? Keep reading to find out.

Related Reading | Why Square Will Create New Bitcoin-Focused Company, According To CEO Jack Dorsey

The Tweets That Point To Bisq

Def! Cc:@brockm

— jack⚡️ (@jack) August 27, 2021

Bisq answered that tweet with which Dorsey announced that his company’s TBD project would be to “build an open platform to create a decentralized exchange for Bitcoin.” The Bisq people claimed that they’ve been building their product “to be the go-to peer-to-peer DEX for bitcoin power-users.”Then, they offered collaboration, “Our heads together could result in something better than any of us could imagine.” 

Dorsey answered “Def!” and copied Mike Brock, leader of the TBD project.

That exchange doesn’t guarantee anything, sure. But the organizations will meet, and they seem to share a lot philosophically speaking. The Bitcoin community, for its part, reacted under Jack’s tweet with a lot of “This is the way,” exciting .gifs, and Bisq praise.

BTC price chart for 08/29/2021 on Coinbase | Source: BTC/USD on TradingView.com
Why Will Dorsey’s DEX Be Bitcoin-Only?

In NewsBTC’s announcement of Square’s Decentralized Exchange project, we quoted:

Jack Dorsey’s tweet quoted an extensive thread by Square executive Mike Brock, TBD project head, who outlined the potential development paths for the open-source DEX.

“We believe Bitcoin will be the native currency of the internet. While there are many projects that will help make the internet more decentralized, our focus is solely on a sound global monetary system for all. But including all requires a few pieces we think we are missing.” Brock said in one of his tweets.

This is in tune with ideas expressed by Dorsey himself.

The reason I have so much passion for #Bitcoin is largely because of the model it demonstrates: a foundational internet technology that is not controlled or influenced by any single individual or entity. This is what the internet wants to be, and over time, more of it will be.

— jack⚡️ (@jack) January 14, 2021

After all, Square created the Bitcoin-focused TBD “with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services.”

Square is creating a new business (joining Seller, Cash App, & Tidal) focused on building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services. Our primary focus is #Bitcoin. Its name is TBD.

— jack⚡️ (@jack) July 15, 2021

Everything That Makes Bisq Special

A couple of years ago, Manfred Karrer, Bisq co-founder, spoke to CoinDesk.”The goal is to become as decentralized and censorship-resistant as bitcoin. That’s a very high goal and it took bitcoin a very long time to get there,” he said. On Bisq’s site, they claim that “Bisq is code, not a company.” And said software is “open-source and community-driven.” What else makes Bisq special? Well…

Related Reading | Running Bitcoin: Passing The Torch From Hal Finney To Jack Dorsey

  • First of all, “It’s software you run on your own hardware, which connects to other people running the Bisq software to facilitate trades.” Sort of like how torrents work.
  • Bisq does not hold Bitcoin or any national currency. All the deals are between “the trading peers themselves.” And Bisq only has minimal information about either of them. Also, “no data is stored on who trades with whom.”
  • And speaking about privacy. “All Bisq data is transferred over its own secure peer-to-peer network, which is built on top of the Tor network—no central servers.”
  • The service doesn’t require registration.
  • To grease the wheels, “Both traders are required to pay security deposits, which are refunded after trades are completed.”
  • Bisq doesn’t accept Paypal or credit cards because chargebacks are too easy.
  • Bisq eliminates “the need for trusted third party exchange services.”
  • The Bisq network “is fully peer-to-peer in that it requires no centrally-controlled servers and has no single points of failure.”

However, you should also know that someone hacked Bisq that one time, stealing $250K.

Featured Image by Jeremy Zero on Unsplash – Charts by TradingView

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Square’s Cash App Reports $2.7B In Quarterly Bitcoin Revenue, A 200% Jump

Square has had a busy weekend. The company made headlines for it’s purchase of Australia-based fintech firm, Afterpay, in an all-stock deal. Square then went on to release it’s Q2 2021 Shareholder Letter, filled to the brim with company insights – including some strong growth numbers in crypto transactions on Square’s mobile product, Cash App.

Breaking Down The Numbers

Square’s gross profit in Q2 was a healthy $546M, reflecting a 91% increase year-over-year. Bitcoin gross profit on Cash App specifically accounted for roughly 10% that, coming in at around $55M; this reflected a substantial increase from the $17M in bitcoin gross revenues that the company saw in Q2 last year.

Bitcoin yearly revenue saw exceptional jumps as well, rising over 200% to ring in $2.72B. This time last year that number was at $875M. While some may call out the relatively thin margin of gross profit relative to revenues, Square maintains that driving company profits from bitcoin transactions are clearly low-priority. Bitcoin gross profits reflected only roughly 2% of bitcoin revenues for Cash App in Q2.

In fact, the company explicitly calls out net revenues exclusive of bitcoin transactions. According to the shareholder report, Square deducts bitcoin revenue because their “role is to facilitate customers’ access to bitcoin.” The company is seemingly playing the “long game” with crypto, encouraging accessibility and minimizing fees.

Square has seen substantial growth and with new acquisitions, looks primed for future fintech disruption. | Source: NYSE: SQ on TradingView.com

Related Reading | TA: Bitcoin Corrects Gains, Why BTC Must Could Extend Losses

It’s Not All Green Days

Despite substantial growth from the reported numbers year-over-year, bitcoin’s price has seen declines relative to the first quarter of the year. As such, both bitcoin revenue and gross profit from bitcoin for Cash App saw declines relative to Q1 2021 – as Cash App only charges a small margin on the market cost of bitcoin.

Accordingly, the letter notes that bitcoin price volatility in the quarters ahead, along with changes in customer demand, will likely continue to impact Cash App profits and revenues from crypto.

Additionally, Square has purchased $220M worth of bitcoin between Q4 2020 and Q1 2021. Because bitcoin is considered an “indefinite-lived intangible asset”, the company recognized a $45M impairment loss on the quarter on the firm’s bitcoin investment.

In all, Cash App’s continued success beyond bitcoin will likely bode well for the company’s crypto engagement, too. Cash App revenue excluding bitcoin in Q2 came in at around $600M – an increase of 87% year-over-year. Square’s broader Q2 numbers showed strong growth as well, with the quarter being the second-best in the past 5 quarters with regards to net income.

There is clearly more growth on the horizon when it comes to Jack Dorsey-led Square.

Related Reading | Bear Market Over? Why Bitcoin Could Soar TO $45K As Strong Holders Grow

Featured image from Pixabay, Charts from TradingView.com