Is BTC the final financial solution? In the 21st century, technology has radically transformed the way we interact with the world. From the internet to smartphones, the leaps we’ve made are incredible, and yet, when it comes to the global financial system, we’re still operating in what PayPal’s David Marcus calls the “fax era.”
BTC finds better use than just buying things
In an interview with CNBC on September 11, a former PayPal executive and co-founder of the BTC-focused payment service Lightspark stated that he believes Bitcoin’s Lightning network could simplify the cumbersome process of sending money across jurisdictions.
The lightning network aims to make BTC transactions cheaper, more efficient, and more applicable to tiny payments. It independently processes BTC transactions before settling them on the primary Bitcoin blockchain.
David Marcus stated that despite his efforts to move the world beyond “the fax era of global payments,” he does not believe that BTC will ever become a popular or widespread payment method. He gave an example while stating:
If you were to stop [someone] and wanting to communicate with them you could ask them for an email address and you can email them easily the next minute [and] you could text them.
David Marcus
He stated, however, that there is no universal protocol for sending money over the Internet. With that, he added:
If you were to send them money [but] they were not a U.S citizen here using one of the same fintech apps you’re using, then you wouldn’t be able to do that. So, we’re still in the fax era of global payments.
David Marcus
Marcus explained that transferring funds to non-U.S. residents, in this instance, would require obtaining their bank account number and paying $50 for an international transmission at a local bank. He added that, “If it’s after Friday at 5 p.m., tough luck.”
Prior to working on Bitcoin, Marcus worked on NOVI, a defunct stablecoin wallet software developed by Meta. Marcus resigned from the company in late November 2021, citing his “entrepreneurial DNA” as the reason for his departure in the wake of failed partnerships and regulatory pushback. After six months, he launched Lightspark.
So, what does the future of DeFi and CeFi look like?
Marcus, who co-founded Lightspark in May 2022 and serves as the company’s CEO, stated that his company is currently in a race to address this issue using the Bitcoin Lightning network.
According to Marcus, the company’s objective is to make lightning a “universal protocol for money on the internet,” much like messaging is a universal protocol for communication. However, the currencies transmitted over the network would remain fiat currencies.
Marcus added that “a fragment of a Bitcoin on top of lightning is like a small packet data packet on the internet only for value.” Users could transfer any currency they wanted, including dollars, yen, or euros, and receive any currency they wanted on the other end. He described Lightning as the “real-time,” “low-cost,” and “cash final” settlement layer in between.
However, the former PayPal president believes that, in the end, Bitcoin Lightning will be used primarily for international transfers rather than regular purchases. “Our view is actually that Bitcoin is not the currency that people will use to buy things.”
The executive’s views are similar to those of Jack Mallers, CEO of Strike, a company that also uses lightning to facilitate cost-effective international currency transfers. The wallet app now facilitates lightning-based international remittances to 65 countries, including Argentina, Nigeria, and Ghana, where users can receive transactions in their local currency via a bank account.
PayPal now enables users to buy, sell, and hold BTC Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC), among others. Last month, the payment platform announced its own stablecoin, PYUSD, which is intended to “transform payments in Web3 and digitally native environments.”
