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How the Lightning Network Can Help Businesses Transact More Efficiently

How the Lightning Network Can Help Businesses Transact More Efficiently

Businesses of all sizes are always looking for ways to press forward, whether that consists of new products, streamlined services, or accepting innovative ways of processing and accepting payments.

Years ago, accepting Bitcoin as payment for goods or services was looked at as an exciting new way to put businesses on the map. Currently, there are several major U.S.-based companies that actively accept Bitcoin: Microsoft, PayPal, Home Depot, AMC Theatres, AT&T, and more. However, as more businesses have begun to accept Bitcoin, they have started to look deeper into common issues such as scalability, slow transaction speeds, and costly transactions. Many are also wondering how Bitcoin can improve other areas of their business. Enter the Lightning Network. 

What is the Lightning Network? 

To fully understand the Lightning Network and what it can do for businesses, you first must understand the scalability issue of Bitcoin. As Bitcoin became popular, more people got into the space whether it was for a means of investment, remittance, boosting efficiency, or even wealth preservation. Although exciting, those who used standard Bitcoin transactions saw that it was too slow and expensive for commerce. This led to the undesired conclusion that Bitcoin had a massive scalability problem. 

Due to the scalability problem, the Lightning Network was developed. The Lightning Network is a second layer solution, which means that it is built on top of the main Bitcoin blockchain. Lightning introduces “state channels” which allow users to spend Bitcoin at the speed of the Internet. 

For example, say that you want to use the network to transact with your supplier Derek. Before any transactions happen, you will both need to fund a channel. For this example, let’s say that you both put in 1 BTC each, totaling 2 BTC for the channel. As soon as it is funded, the channel will be created and at that point, you will be able to send as many transactions to each other as you want, as long as the total value of the transaction does not exceed the amount used to fund it. 

In a scenario where you want to pay Derek 0.5 BTC, you can send that instantaneously with low fees. At that point, you would have 0.5 BTC in your balance while Derek has 1.5 BTC. You can continue to keep making transactions, and when you are finished, the channel will be closed and published onto the main blockchain where it can be added to the ledger of all transactions. 

Business use cases for the Lightning Network 

Think of the Lightning Network as your business's personal highway for BTC transactions. Lightning has faster speeds and lower costs, meaning more efficient transactions. This makes the Lightning Network ideal for: 

  • Transactions: The Lightning Network improves transactions — which were not as efficient in Bitcoin as most wanted it to be. The lower costs and faster speeds are better for BTC transactions. 
  • Remittances: On its own, Bitcoin has already revolutionized the world of remittances. With the power of the Lightning Network, these remittances are even more cost effective and faster. 
  • Improved Payment Model: With the Lightning Network, businesses have a more efficient payment model for their goods and services. Lightning-quick BTC transactions at lower costs, it’s a dream scenario for businesses. 

How BlockSpaces Lightning Connect helps businesses harness the power of the Lightning Network  

Oftentimes, businesses who are interested in the Lightning Network are aware of the benefits but do not have a Lightning literate team or are not interested in managing their own node, liquidity, and channels. BlockSpaces kept that in mind while developing our solution, Lightning Connect.  

BlockSpaces Lightning Finance (LiFi) solution, Lightning Connect, helps businesses harness the power of the Lightning Network by eliminating the headache of self-managed nodes with simplified integration, fully managed liquidity, and non-custodial node management (customer retains full custody at all times). 

With Lightning Connect, businesses can set up nodes in minutes with our easy-to-use wizard, managed by our world-class DevOps team. Once your node is set up, they are accessible in the BlockSpaces interface where you can access our automated liquidity provisioning and channel balancing where we manage your channel and make sure that your business can always send and receive specified amounts. Users interested in ERP integrations have the option to integrate with NetSuite, Microsoft D365, and other ERP systems which enables transactions to seamlessly flow into your chosen ERP system. 

We are making our infrastructure simple and secure. It has never been easier to be a part of the Lightning Network with BlockSpaces Lightning Connect. 

A few years ago, implementing the Lightning Network on a large scale was something that we could only dream about. Fast forward to years later, we are seeing the beginning of something that is incredibly special. 

Bitcoin is constantly evolving its way into global adoption. As businesses begin to understand the value of the Lightning Network, it’s likely that we will see more of them adopting it, and Lightning Connect is here to help your business be at the forefront of the evolution. 

Ready to get started with Lightning Connect? Sign up for the waitlist here.