Lightning Labs announced a $10 million Series A funding round and released its Lightning Loop service in beta.

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Lightning Labs on Series A, Lightning Loop Beta - Bitcoin Magazine

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Lightning Labs, the startup spearheading development of the lnd Lightning Network client, today <a href="https://medium.com/@lightning_labs/entering-the-decade-of-lightning-8c4a4d31167f">announced</a> a $10 million Series A funding round, led by Craft Ventures. Accompanying the announcement, Lightning Labs also <a href="https://blog.lightning.engineering/announcement/2020/02/05/loop-beta.html">released</a> its<a href="https://lightning.engineering/loop/"> Lightning Loop</a> service in beta, marking the company’s first commercial service to help resolve Lightning liquidity bottlenecks.



“I think this funding round is another confirmation that the Lightning Network is getting real,” Lightning Labs Co-Founder and CEO Elizabeth Stark told Bitcoin Magazine. “Our first lnd beta was released less than two years ago, and by now a whole new crop of startups that didn’t even exist yet is building on top of the infrastructure that we provide.”



<figure class="wp-block-image"><img src="https://lh5.googleusercontent.com/_S6nLeOQ1Xuaf2MzcrGRsk8vdfMJi3Uqdt9qy--yn9n_xwnu4Sjj45sBhlUGH2D1pZbQpJ7uKzlSEv9heCxUULza8HOVvoB7rMQRBc9Mw9O7J3xO682ne-XsEhvYHQV-FJZXq_4z" alt="Lightning Labs announced a $10 million Series A funding round and released its Lightning Loop service in beta."/><figcaption>Source: Lighting Labs</figcaption></figure>



<h2>Lightning Loop</h2>



Since lnd was the first Lightning implementation <a href="https://bitcoinmagazine.com/articles/lightnings-first-implementation-now-beta-developers-raise-25m">released</a> in beta in March 2018, Lightning Network growth has exploded.<a href="https://1ml.com/"> Publicly available data</a> reveals that Bitcoin’s overlay network for fast and cheap payments today consists of over 11,000 nodes, sharing almost 36,000 payment channels, together holding more than 870 bitcoin (worth about $8 million at the time of writing).<a href="https://blog.bitmex.com/lightning-network-part-7-proportion-of-public-vs-private-channels/"> Estimates</a> suggest that private channels add between 35 to 40 percent to these numbers.



One remaining challenge on the Lightning Network is channel liquidity. In contrast to regular, on-chain Bitcoin payments, Lightning users can only make or receive payments if they have sufficient funds locked up on the right side of their payment channels. If a user (say, a merchant) mostly receives payments, funds in his channels can quickly accumulate on his end — making him unable to receive more payments through his existing channels. Vice versa, a user that mostly sends payments can find his side of the channels depleted, as all funds accumulate on the opposite end.



Lightning Loop lets users trustlessly rebalance their channels through on-chain payments to and from Lightning Labs. To get more inbound liquidity (needed to receive Lightning payments), they can “Loop Out,” paying Lightning Labs over the Lightning Network to receive an on-chain transaction in return. To get more outbound liquidity (needed to send Lightning payments), they can “Loop In,” paying Lightning Labs on-chain and receiving a Lightning payment in return.



“Lightning Loop is a scalable commercial submarine-swap service,” Lightning Labs Co-Founder and CTO Olaoluwa “Laolu” Osuntokun summarized. “If you visualize it, the user makes a loop with themselves, crossing the on-chain and off-chain boundaries.”



Leveraging Lightning Loop, users can keep their existing channels open indefinitely, instead of having to close and open channels each time they need to rebalance liquidity. This offers more block-space efficiency, lower fees and more Lightning Network stability as channels are more reliable, benefiting payment routing.



On top of that, Lightning Loop can also be used to make or receive on-chain payments indirectly from a Lightning channel. If someone, for example, wants to deposit bitcoin into an exchange that only accepts on-chain transactions, funds can be sent to the exchange through a Loop Out. Conversely, to withdraw from the exchange, on-chain funds can be converted easily into a Lightning channel through Loop In.



Lightning Loop has been in alpha since March 2019 and June 2019 for Loop Out and Loop In, respectively. Developers have been experimenting with it since then, and some companies have already started building products on top of the service. With the beta release, Lightning Labs is now opening up Lightning Loop for wider use. This, for example, also means that the initial amount limits are lifted to match the Lightning protocol’s existing limit of 0.04 BTC.



“Another big advantage is that with our latest lnd release, you can combine Lightning Loop with multi-path payments: a user can top off, or make more space for receiving in several channels at the same time, at the cost of only a single on-chain output,” Osuntokun said. “We also offer discounts for users if they want to wait a bit longer for their swaps, so we can batch them together in one on-chain transaction to minimize fees.”



Lightning Loop is Lightning Labs’ first commercial product; the company charges upward from a 0.05 percent fee for each Loop, with the exact amount depending on the size of the payment and some other factors.



<h2>Lighting Labs’ Series A</h2>



Lightning Labs was one of the first startups to start implementing the Lightning Network protocol in 2015. Today, the lnd implementation it spearheads is generally considered one of three major Lightning implementations, the other two being ACINQ’s Eclair and Blockstream’s c-lightning. The company had already raised a little over $3 million in venture funding from investors including Twitter and Square CEO Jack Dorsey, former PayPal COO David Sacks, Litecoin Creator Charlie Lee and former BitGo CTO Ben Davenport.



Now, Lightning Labs has announced a $10 million Series A round, led by Craft Ventures, with Craft Ventures Managing Director Brian Murray joining the Lightning Labs board. Notably, among the investors in the Series A are also several firms and venture capitalists from the traditional financial sector.



“As we are seeing global instability with symptoms like negative interest rates, people from the finance world are getting interested in Bitcoin. And they get Lightning; that’s very powerful,” Stark told Bitcoin Magazine. “As Jack Dorsey said, ‘the internet needs a native currency.’ With Bitcoin and Lightning, we are operating at the intersection of tech and finance, and the Lightning Loop beta shows we are building a new type of financial infrastructure.”



Besides Craft Ventures, Ribbit Capital and Pfeffer Capital’s John Pfeffer represent some well-known venture capital names in tech joining the funding round, while Stone Ridge Holdings Group Founder and CEO Ross Stevens, former Goldman Sachs executive David Heller and RRE Ventures, for example, have more finance-focused backgrounds. Other investors include Slow Ventures, M13, First Round Capital Founder Howard Morgan and Electric Capital Founder Avichal Garg.



“Bitcoin is now established as a reliable and uncorrelated store of value,” Craft Ventures’ Murray told Bitcoin Magazine. “Next, bolstered by the Lightning Network, bitcoin will prove it is also a viable currency (like USD). We are excited to support the Lightning Labs team as they pioneer the development of this critical infrastructure and growing developer community.”



Indeed, through lnd, Lightning Labs already provides the infrastructure of a wide range of applications and dozens of companies. With its team of 16, Lightning Labs itself offers a Lightning desktop app and mobile wallet, as well as tools for lnd such as monitoring solution lndmon, and now, of course, Lightning Loop. Other startups building on lnd include payment solution Fold, the Zap wallet and Lightning-specific exchange Sparkswap. Additionally, gift card and phone credit merchant Bitrefill was among the first companies to start accepting Lightning payments using lnd and has been rolling out a range of Lightning liquidity services of its own since. Major cryptocurrency exchange Bitfinex also recently <a href="https://blog.bitfinex.com/announcements/struck-by-the-lightning/">announced</a> support for Lightning deposits and withdrawals, for which it relies on lnd.



“I’m proud of what our team has done,” Stark said. “We are first and foremost an infrastructure provider, and our infrastructure is fueling other companies that build on top of it to bring in the next billion users. Lightning is like Bitcoin, there isn’t any one company to rule the Lightning protocol. Everyone working on Lightning is contributing to make the pie bigger.”

Bitcoin Magazine provides news, analysis, information, commentary and price data about Bitcoin.

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Aaron van Wirdum is interested in decentralized consensus, FOSS, privacy in the digital age, censorship resistant payments, and more of that stereotypical Bitcoin stuff. Hodls BTC. (tip address / tippin.me / PayNym)

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Lightning Labs on Series A, Lightning Loop Beta

Lightning Labs announced a $10 million Series A funding round and released its Lightning Loop service in beta, two significant milestones for the firm.

Lightning Labs, the startup spearheading development of the lnd Lightning Network client, today announced a $10 million Series A funding round, led by Craft Ventures. Accompanying the announcement, Lightning Labs also released its Lightning Loop service in beta, marking the company&rsquo;s first commercial service to help resolve Lightning liquidity bottlenecks. &ldquo;I think this funding round is another confirmation that the Lightning Network is getting real,&rdquo; Lightning Labs Co-Founder and CEO Elizabeth Stark told Bitcoin Magazine. &ldquo;Our first lnd beta was released less than two years ago, and by now a whole new crop of startups that didn&rsquo;t even exist yet is building on top of the infrastructure that we provide.&rdquo; Source: Lighting Labs Lightning Loop. Since lnd was the first Lightning implementation released in beta in March 2018, Lightning Network growth has exploded. Publicly available data reveals that Bitcoin&rsquo;s overlay network for fast and cheap payments today consists of over 11,000 nodes, sharing almost 36,000 payment channels, together holding more than 870 bitcoin (worth about $8 million at the time of writing). Estimates suggest that private channels add between 35 to 40 percent to these numbers. One remaining challenge on the Lightning Network is channel liquidity. In contrast to regular, on-chain Bitcoin payments, Lightning users can only make or receive payments if they have sufficient funds locked up on the right side of their payment channels. If a user (say, a merchant) mostly receives payments, funds in his channels can quickly accumulate on his end &mdash; making him unable to receive more payments through his existing channels. Vice versa, a user that mostly sends payments can find his side of the channels depleted, as all funds accumulate on the opposite end. Lightning Loop lets users trustlessly rebalance their channels through on-chain payments to and from Lightning Labs. To get more inbound liquidity (needed to receive Lightning payments), they can &ldquo;Loop Out,&rdquo; paying Lightning Labs over the Lightning Network to receive an on-chain transaction in return. To get more outbound liquidity (needed to send Lightning payments), they can &ldquo;Loop In,&rdquo; paying Lightning Labs on-chain and receiving a Lightning payment in return. &ldquo;Lightning Loop is a scalable commercial submarine-swap service,&rdquo; Lightning Labs Co-Founder and CTO Olaoluwa &ldquo;Laolu&rdquo; Osuntokun summarized. &ldquo;If you visualize it, the user makes a loop with themselves, crossing the on-chain and off-chain boundaries.&rdquo; Leveraging Lightning Loop, users can keep their existing channels open indefinitely, instead of having to close and open channels each time they need to rebalance liquidity. This offers more block-space efficiency, lower fees and more Lightning Network stability as channels are more reliable, benefiting payment routing. On top of that, Lightning Loop can also be used to make or receive on-chain payments indirectly from a Lightning channel. If someone, for example, wants to deposit bitcoin into an exchange that only accepts on-chain transactions, funds can be sent to the exchange through a Loop Out. Conversely, to withdraw from the exchange, on-chain funds can be converted easily into a Lightning channel through Loop In. Lightning Loop has been in alpha since March 2019 and June 2019 for Loop Out and Loop In, respectively. Developers have been experimenting with it since then, and some companies have already started building products on top of the service. With the beta release, Lightning Labs is now opening up Lightning Loop for wider use. This, for example, also means that the initial amount limits are lifted to match the Lightning protocol&rsquo;s existing limit of 0.04 BTC. &ldquo;Another big advantage is that with our latest lnd release, you can combine Lightning Loop with multi-path payments: a user can top off, or make more space for receiving in several channels at the same time, at the cost of only a single on-chain output,&rdquo; Osuntokun said. &ldquo;We also offer discounts for users if they want to wait a bit longer for their swaps, so we can batch them together in one on-chain transaction to minimize fees.&rdquo; Lightning Loop is Lightning Labs&rsquo; first commercial product; the company charges upward from a 0.05 percent fee for each Loop, with the exact amount depending on the size of the payment and some other factors. Lighting Labs&rsquo; Series A. Lightning Labs was one of the first startups to start implementing the Lightning Network protocol in 2015. Today, the lnd implementation it spearheads is generally considered one of three major Lightning implementations, the other two being ACINQ&rsquo;s Eclair and Blockstream&rsquo;s c-lightning. The company had already raised a little over $3 million in venture funding from investors including Twitter and Square CEO Jack Dorsey, former PayPal COO David Sacks, Litecoin Creator Charlie Lee and former BitGo CTO Ben Davenport. Now, Lightning Labs has announced a $10 million Series A round, led by Craft Ventures, with Craft Ventures Managing Director Brian Murray joining the Lightning Labs board. Notably, among the investors in the Series A are also several firms and venture capitalists from the traditional financial sector. &ldquo;As we are seeing global instability with symptoms like negative interest rates, people from the finance world are getting interested in Bitcoin. And they get Lightning; that&rsquo;s very powerful,&rdquo; Stark told Bitcoin Magazine. &ldquo;As Jack Dorsey said, &lsquo;the internet needs a native currency.&rsquo; With Bitcoin and Lightning, we are operating at the intersection of tech and finance, and the Lightning Loop beta shows we are building a new type of financial infrastructure.&rdquo; Besides Craft Ventures, Ribbit Capital and Pfeffer Capital&rsquo;s John Pfeffer represent some well-known venture capital names in tech joining the funding round, while Stone Ridge Holdings Group Founder and CEO Ross Stevens, former Goldman Sachs executive David Heller and RRE Ventures, for example, have more finance-focused backgrounds. Other investors include Slow Ventures, M13, First Round Capital Founder Howard Morgan and Electric Capital Founder Avichal Garg. &ldquo;Bitcoin is now established as a reliable and uncorrelated store of value,&rdquo; Craft Ventures&rsquo; Murray told Bitcoin Magazine. &ldquo;Next, bolstered by the Lightning Network, bitcoin will prove it is also a viable currency (like USD). We are excited to support the Lightning Labs team as they pioneer the development of this critical infrastructure and growing developer community.&rdquo; Indeed, through lnd, Lightning Labs already provides the infrastructure of a wide range of applications and dozens of companies. With its team of 16, Lightning Labs itself offers a Lightning desktop app and mobile wallet, as well as tools for lnd such as monitoring solution lndmon, and now, of course, Lightning Loop. Other startups building on lnd include payment solution Fold, the Zap wallet and Lightning-specific exchange Sparkswap. Additionally, gift card and phone credit merchant Bitrefill was among the first companies to start accepting Lightning payments using lnd and has been rolling out a range of Lightning liquidity services of its own since. Major cryptocurrency exchange Bitfinex also recently announced support for Lightning deposits and withdrawals, for which it relies on lnd. &ldquo;I&rsquo;m proud of what our team has done,&rdquo; Stark said. &ldquo;We are first and foremost an infrastructure provider, and our infrastructure is fueling other companies that build on top of it to bring in the next billion users. Lightning is like Bitcoin, there isn&rsquo;t any one company to rule the Lightning protocol. Everyone working on Lightning is contributing to make the pie bigger.&rdquo;

Aaron van Wirdum is interested in technology and how it affects social and political structures. He has been covering Bitcoin since 2013, focusing on privacy, scalability and more. Hodls BTC.

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Elizabeth Stark is the cofounder and CEO of Lightning Labs, the California-based startup spearheading development of the lnd Lightning implementation.

Sending Money Instantly, Around the World: A Q&amp;A With Lightning Labs CEO Elizabeth Stark - Bitcoin Magazine

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Elizabeth Stark is the cofounder and CEO of Lightning Labs, the California-based startup spearheading development of the lnd Lightning implementation. Coming from an academic and tech policy background, she has been involved with Lightning since its earliest days as a reviewer of the Lightning Network white paper. She has played an integral part in popularizing this technology to bring cheap, instant and private payments to Bitcoin as a second-layer solution.



Elizabeth, the Lightning Network has come a long way from the initial publication of its white paper. What has surprised you the most so far?



I've been quite surprised by the speed of growth and adoption. Things changed so dramatically in the last year in the world of Bitcoin and Lightning. For our lnd implementation, we released the beta mainnet version on March 15, 2018, and if you had told me the adoption of the technology would have happened at the pace it did over the past year, I wouldn't have believed it. The degree of developer uptake, user enthusiasm and companies building on top of Lightning have all far exceeded my expectations.



One important caveat here is that despite the huge growth in nodes, channels and funds on the network, we still have limits in place to ensure that people don't put more money on the network than they're willing to lose. It is early beta software after all.



What’s the biggest misconception about Lightning?



Quite a lot of people think that with Lightning you trust your counterparty, but the entire system was designed to specifically avoid this. The brilliance of it is the series of contracts that enable you to go back to the blockchain in case of any kind of dispute, and both parties are able to recover their funds.



What about an interesting, yet largely unknown fact?



Not all capital on Lightning is equal. Alex Bosworth on our team has been doing some great work on analyzing Lightning liquidity and node connectivity, and this is a theme that I think we'll see evolve substantially over the next few years.



Where do you see Lightning in a year from now?



This coming year is all about building out the infrastructure to make things work as simply as possible. Some of our big areas of focus are Neutrino (the privacy-preserving light client technology that enables lnd to run on mobile phones and laptops in a non-custodial manner), autopilot and node scoring (which will automatically open channels for users and help ensure they're reliable) and watchtowers (which ensure that channel counterparties can't cheat if a user goes offline for an extended period of time). The goal is to ultimately get to a point where it just works; as one of our engineers likes to say, “basic payment — executed perfectly.” The path to getting there is long and arduous, but I'm confident we will make it happen.



How about in ten years from now?



The ten-year vision is that of a new decentralized financial infrastructure for the world. Why can't I just send value on the internet in the way I can send a photo in any app? There was a point when it was a crazy idea to send an email to anyone around the world. I see the role of Lightning as making it seem crazy that we couldn't send money instantly, around the world.



What are the biggest challenges to getting there?



Usability and infrastructure, hands down. I'm very passionate about the usability angle because I believe in order for this technology to reach the masses, it has to be elegant and easy to use. And in many cases, the reason why it's not yet easy to use is because the requisite infrastructure isn't there to make it possible. Building infrastructure is hard and takes time, especially at the protocol level. A lot of people want everything to be ready right away, but that's not how technology works. So it'll just take time to build it all out.



Does Lightning need a killer app? If so what is it, or what will it be?



I'm not sure it does. The way that I see things evolving is that there will be tons of applications that people use, and they will meet different needs for different people. For example, I'm a huge fan of lndwork, a Mechanical Turk-like site that lets people earn satoshis by completing tasks. For some people around the world, the ability to instantly earn bitcoin will be huge, but for others, they may prefer to use Lightning in video games or to tip people or buy pizza or feed chickens. I'm particularly excited about the use cases that we hadn't even thought of — feeding chickens was definitely in this category — and I know there will be many more of those to come.

Sending Money Instantly, Around the World: A Q&A With Lightning Labs CEO Elizabeth Stark

Sending Money Instantly, Around the World: A Q&amp;A With Lightning Labs CEO Elizabeth Stark

Elizabeth Stark is the cofounder and CEO of Lightning Labs, the California-based startup spearheading development of the lnd Lightning implementation. Coming from an academic and tech policy background, she has been involved with Lightning since its earliest days as a reviewer of the Lightning Network white paper. She has played an integral part in popularizing this technology to bring cheap, instant and private payments to Bitcoin as a second-layer solution. Elizabeth, the Lightning Network has come a long way from the initial publication of its white paper. What has surprised you the most so far? I&#039;ve been quite surprised by the speed of growth and adoption. Things changed so dramatically in the last year in the world of Bitcoin and Lightning. For our lnd implementation, we released the beta mainnet version on March 15, 2018, and if you had told me the adoption of the technology would have happened at the pace it did over the past year, I wouldn&#039;t have believed it. The degree of developer uptake, user enthusiasm and companies building on top of Lightning have all far exceeded my expectations. One important caveat here is that despite the huge growth in nodes, channels and funds on the network, we still have limits in place to ensure that people don&#039;t put more money on the network than they&#039;re willing to lose. It is early beta software after all. What&rsquo;s the biggest misconception about Lightning? Quite a lot of people think that with Lightning you trust your counterparty, but the entire system was designed to specifically avoid this. The brilliance of it is the series of contracts that enable you to go back to the blockchain in case of any kind of dispute, and both parties are able to recover their funds. What about an interesting, yet largely unknown fact? Not all capital on Lightning is equal. Alex Bosworth on our team has been doing some great work on analyzing Lightning liquidity and node connectivity, and this is a theme that I think we&#039;ll see evolve substantially over the next few years. Where do you see Lightning in a year from now? This coming year is all about building out the infrastructure to make things work as simply as possible. Some of our big areas of focus are Neutrino (the privacy-preserving light client technology that enables lnd to run on mobile phones and laptops in a non-custodial manner), autopilot and node scoring (which will automatically open channels for users and help ensure they&#039;re reliable) and watchtowers (which ensure that channel counterparties can&#039;t cheat if a user goes offline for an extended period of time). The goal is to ultimately get to a point where it just works; as one of our engineers likes to say, &ldquo;basic payment &mdash; executed perfectly.&rdquo; The path to getting there is long and arduous, but I&#039;m confident we will make it happen. How about in ten years from now? The ten-year vision is that of a new decentralized financial infrastructure for the world. Why can&#039;t I just send value on the internet in the way I can send a photo in any app? There was a point when it was a crazy idea to send an email to anyone around the world. I see the role of Lightning as making it seem crazy that we couldn&#039;t send money instantly, around the world. What are the biggest challenges to getting there? Usability and infrastructure, hands down. I&#039;m very passionate about the usability angle because I believe in order for this technology to reach the masses, it has to be elegant and easy to use. And in many cases, the reason why it&#039;s not yet easy to use is because the requisite infrastructure isn&#039;t there to make it possible. Building infrastructure is hard and takes time, especially at the protocol level. A lot of people want everything to be ready right away, but that&#039;s not how technology works. So it&#039;ll just take time to build it all out. Does Lightning need a killer app? If so what is it, or what will it be? I&#039;m not sure it does. The way that I see things evolving is that there will be tons of applications that people use, and they will meet different needs for different people. For example, I&#039;m a huge fan of lndwork, a Mechanical Turk-like site that lets people earn satoshis by completing tasks. For some people around the world, the ability to instantly earn bitcoin will be huge, but for others, they may prefer to use Lightning in video games or to tip people or buy pizza or feed chickens. I&#039;m particularly excited about the use cases that we hadn&#039;t even thought of &mdash; feeding chickens was definitely in this category &mdash; and I know there will be many more of those to come.

Sending Money Instantly, Around the World: A Q&#038;A With Lightning Labs CEO Elizabeth Stark –

Sending Money Instantly, Around the World: A Q&amp;A With Lightning Labs CEO Elizabeth Stark –

https://bitcoinmagazine.com/articles/sending-money-instantly-around-the-world-a-qa-with-lightning-labs-ceo-elizabeth-stark

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Lightning Labs Announces $10 Million Raise As Lightning Loop Enters Beta

Sending Money Instantly, Around the World: A Q&A With Lightning Labs CEO Elizabeth Stark