Will Square Emerge As Dominant Hub Of Lightning Network?
Serial innovator and Twitter CEO Jack Dorsey is also a well-known Bitcoin enthusiast and investor. He also owns Square, a payment processing company with a market cap of $29.75 billion. Square also supports trading Bitcoin through its Square Cash Application.
In line with other major social media platform providers, Square does not permit users from posting adverts related to cryptocurrencies, even though Dorsey is a strong supporter of Bitcoin. In fact, he anticipates Bitcoin (BTC) to become a global currency in ten years. On several occasions, he has revealed his positive opinion about the crypto.
In a recent interview with the Times and in a direct interaction through podcast, Jack has ascertained his optimistic view about the crypto. Jack continues to promote the adoption of Bitcoin as a currency of choice for micro-payment.
David Sacks, Kevin Hartz, Charlie Lee and several others invested $2.50 million in Lightning Labs founded by Elizabeth Stark. Following the news of investment in Lightning Labs, Dorsey said Lightning Network is “one of the most important projects in crypto overall adding that he is excited to be an investor”. With leading from Stark, Lightning Labs is working on the Lightning Network (LN).
LN, a scaling solution that ensures transactions are carried outside the main chain to attain speed, offers scalability and permits micro-payment. Due to this, the innovative solution offers trust but causes concern about possible centralization through hubs.
However, necesary action has been taken to ensure security, such as the launch of multi-hoop routing and conditional payments, cryptographic evidence and time-outs. Additionally, payments can be done only when both parties are online and use LN-supported Bitcoin wallets.
Jack Dorsey is supporting Bitcoin because he has a genuine interest in the Lightning Network. It should be remembered that one of the LN operates around central hubs and both parties must use a wallet to support the LN. Therefore, with Square promoting BTC purchases and not vice versa, it is logical to make a judgment that Square will act as a custodial wallet for the LN in some manner.
Square is therefore likely to emerge into this centralized hub and make profit not only from spreads (difference between buying and selling price of BTC), but also from service fees as a favored hub from which users can open channels. This is the only way, if anything, for ordinary consumers to pay for their coffee using BTC fueling adoption. And their objective is not a distant dream.
After all, the Square network is an established name in the United States. With Square behaving as a custodial wallet and a typical hub, traders will easily receive their BTC, and since LN can handle billions of transactions in a second, more people will be lured towards using it, paving the way for mass adoption.