This is a value for value post: see the explanation in the footer.
In the last couple of days there's been a new entrant into the "Lightning as a Service" market with Lightspark.
Lightspark is a VC backed big money corporate entry into the world of Lightning. It is led by David Marcus:
David Marcus
Chief Executive Officer
David is the CEO and co-founder of Lightspark. Most recently he led all payments and crypto efforts at Meta/Facebook. In 2018, David started Diem (fka Libra).
(He is a footnote in our Crypto Class Action as he was working on Facebook's crypto offering at the same time as Facebook declared the rest of us to be "frequently associated with false and deceptive practices")
Obviously they've got all the right VC names on their website.
And they're not giving their time away for free, they know how to charge. Before I tell you what they'll do, I'll show you the prices.
Is it worth it?
Straight up I'm going to surprise you: yes, I understand why they're charging those figures and for what you get, it is probably good value.
I'll also drop in another similar service (though much less VC and simpler but offering the same): nodeless.io.
No I won't be using it
Whilst I think $1,500 per month is a great deal of money, I actually understand what that cost represents and it probably isn't extraordinarily ridiculous. Nodeless fees I could absorb but I'm going to explain what I do pay for in the way of Lightning services and why that's the better way for my service.
V4V.app fees
Right now @v4vapp is charging 200 sats + 1.5% per transaction BUT I am performing a currency conversion from sats to Hive. As soon as there is a decent way to store sats denominated values on Hive ( @disregardfiat and @spknetwork are working in this direction) I will try to add that and drop the fees.
As you can see that's similar to what Nodeless are charging but higher because @v4vapp is having to carry the exchange fluctuations and risk.
Lightning Costs
I'll try not to repeat myself too much because I've written a lot about Lightning, but here are the basics of what you are getting for you $1,500 per month or 0.5% of your turnover.
Node management: they're running a server with 24x7 up-time, backups and upgrades. Lightning's core software doesn't have an easy way to run redundant servers but the bigger more centralised Lightning services have found ways to do this. Nevertheless it's not uncommon for even quite large players to have scheduled or unscheduled down time.
Capital investment in BTC on the Node: Lightning works by moving sats back and forth in channels. Those sats are locked in 2 party BTC time lock contracts. Therefore the total sending and receiving capability of your Lightning node is an investment in BTC that is locked up.
At risk capital: one should consider BTC on any Lightning node (right now for @v4vapp that number is around 22.6m sats or 0.226 BTC) at risk. Lightning is about as far away from cold storage as you can get. We have no idea if there will be an exploit next week that lets someone drain wallets. I don't think this is likely, but I certainly consider it a risk.
Liquidity management: this is the tricky bit. Not only do you have to have BTC on your node, it needs to be in the right places. I'm not going to explain liquidity here again but managing this is a real skill. There is the opportunity to earn a little bit from routing other people's payments through your node (if it helps your liquidity position). I've gotten a bit better at this but it's still very small money.
Overall I do consider that I put around $1,500 worth of my own effort into @v4vapp. So in many ways it doesn't seem unreasonable to pay someone else to do that.
At present the bit I outsource is the technical running of the actual Lightning server and core software which only costs me around $10 per month.
Centralisation
And it all comes back to this: every aspect of Lightning pushes people towards custodial solutions and away from decentralisation.
Eric Wall also said exactly this on a recent episode of What Bitcoin Did Podcast.
Which all comes back to why I'm working on Hive bridging to Lightning. The VC money and effort flooding in to Lightning WILL build useful edge infrastructure we can use and avoid these centralised traps.
That's why I'm building bridges away from the centralised services and into Hive.
Final words
I don't think any crypto solution is going to conquer and win against the banks, Visa, Mastercard, Amex and the others IN THE DEVELOPED WORLD.
We're going to win from the grass roots UP in the places that are under-served or where unstable local currencies can be replaced by Dollar linked solutions. As such I think pure BTC adoption is a way off yet and predictions of the demise of the US Dollar are overblown.
Value for Value
For the last few months while building @v4vapp I was generously supported by the DHF. Going forward I have a much more modest support which covers direct server costs and a little of my time.
If you appreciate the work I do on and around Hive, you can express this directly: upvoting posts on Hive is great. Also consider a direct donation (there's a Tip button on Hive or a Lightning Address) on all my posts.
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