Bitcoin is still the future of payments, says Lightspark CEO David Marcus on this week’s DecoderPod guest-hosted by alexeheath.
So I had this idea in the back of my mind, but I wasn’t sure yet that I was going to just take the plunge and go with it. Many friends told me, “You should take at least nine months off.” And after month three, I was really going crazy, so it was time for me to get back on the horse.
So we actually explored Lightning in the early days of Libra, and we spent time looking at it, and we had a lot of back and forth, and Lightning wasn’t mature enough at the time. We’re talking early 2018. And the problem with Bitcoin as a pure play transactional asset, if you don’t have a real-time settlement network to move money in real time is the volatility of Bitcoin itself. And so it makes it a poor medium of exchange.
Is there any concern with the fact that the protocol is private in that it’s not totally visible on chain like Bitcoin in terms of the decentralization of it over time? Yeah, that’s a good question. I feel like I had a deep sense of unfinished business, and I think all of us, all of my co-founders here, feel exactly the same way because the fact that we’re in 2023 and that money moves the same way it moved in the late ’60s and ’70s on top of completely archaic, outdated systems is borderline infuriating to me. It’s just not right. It’s an anomaly in the world. Money should move the same way anything else on the internet moves.
The first step is really simplifying all of that, really removing all of the complexity and building an enterprise-grade entry point to Lightning so that developers and platforms around the world can actually tap into all the benefits of a real-time global payment network. Who do you see the customer being for this, maybe now, but also, I think probably more importantly, as you think about company building in the next several years? Who do you see being the companies wanting to plug into this network?So right now, we’re really targeting this toward developers, wallets, exchanges, OTC players.
This is naturally leading us into company process questions. How do you go about selling this product? Do you build a sales team in-house to go out and knock on people’s doors, so to speak? Do you just wait and hope that developers see this and flock to it? You’re starting the company from scratch. How do you think about that?
Maybe if we could dive into that a little more — how do you think about using capital now as a startup founder versus when you worked at a large company with a ton of resources before? You have a lot of resources relative to most companies your size and just personal connections. You mentioned, “We want to operate as though we may need to raise at some point. We don’t want to just think that we have unlimited resources.
So first of all, I don’t see myself as a manager. It feels very “large company” to talk about it that way. But also, remember that I did startups for all of my life before this decade in large companies. So it feels right at home, it feels very natural for me, and it feels like something that’s really in my DNA. It feels just right.
This idea of transacting with Bitcoin is a fascinating one to me, and it’s one that the industry has talked about for years, and obviously, we’re talking about it with Lightning. I think the inherent tension in this is that many Bitcoin buyers really still see Bitcoin as an investment, even though you’ve got people like Gensler out there saying, “It’s the only crypto I would consider a commodity. Doesn’t really pass the Howey Test,” which maybe that’s debatable —It’s not, okay.
So we see it as a core infrastructure to move value around. And then our hope is that developers and other players will build services on top of this stack that are denominated in whatever currency they choose. Yeah, that’s a great question. We spent a lot of time engaging with all kinds of potential future customers, and they fall into two categories. One is they have looked into Lightning because, on paper, it looks amazing. And then they’ve spent cycles to actually try to get a well-connected node and try to get transactions moving on the network.
So I think it’s essential. I’m optimistic that we’re moving in the right direction. I think right now, you can see the House Financial Services Committee actually moving in a direction of trying to bring more clarity for digital assets in general. So I think we’ll get to a good place, but it’s been, I know, very frustrating for many, many players out there to not have a clear set of rules that they can operate around.
And I think, of course, the network, you could have said a decade ago that this was actually at risk of being hacked or risk of vulnerabilities, et cetera. But this network has proven to be incredibly resilient over 13 years. So I feel really good about that. It’s more of a general trend of the underlying crypto industry that is problematic for the whole industry, rather than Bitcoin itself.
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