Topic: Lightning network as a replacement for SWIFT (Read 167 times)

Of course it doesn't make the lightning network more accessible, and that was never claimed in this post, it's just a service built on top of it. The users don't even interact with bitcoin at all!

The service is basically fiat transfers worldwide made cheaper.

I agree that you would be better off with just native bitcoin, but that's a different story.

With this service, you are able to send fiat(not bitcoin) worldwide cheaper than any other alternative.

As the title of this post says, it's using the lightning network as a replacement for SWIFT, making fiat transfers cheaper.

If you try to replicate this in other ways, either through transferwise, western union, etc, or even buying and selling bitcoin yourself, you're probably going to spend more money in fees than using this.

Again, yes, it's better to natively use bitcoin, but if what you need to do is transfer fiat around the world, this is an innovative service that uses the lightning network to make the transfer of fiat.

And yes, lightning doesn't need Strike, Strike needs lightning. That's why I found it interesting, another application built on top of lightning.

Strike is an innovative application that makes Lightning Network accessible and easy to use for everyone. What a ridiculous statement! Nevertheless, you will be shown statements like this every time you search for information about the Strike app. No, it doesn't make Lightning Network more accessible. What it does is place itself between banks and the permissionless system as another unnecessary intermediary and charges fees for unnecessary services. The Lightning Network doesn't need Strike, but Strike does need LN because it allows the people behind the app to profit off people unaware they can use the network directly without having to pay Jack Mallers or ask his permission to join and participate in case you are from a wrong country.

The sad truth is that centralized payment services can be faster and cheaper than the Bitcoin blockchain(most of the time,not all the time).
But the main benefit of the Bitcoin blockchain is being your own bank and not relying on the mercy of some centralized entity to handle your money.
The whole LN implementation into fiat transactions seems like an unnecessary "middleman" layer on top of an existing fiat payment system.I have nothing against that.Let's see what will happen with this innovation,it might work in the end.
I hear rumors that countries like Russia and China might be excluded from the SWIFT system.This might force them to seek for an alternative.
 

It definitely is interesting to see new applications being built using the Lightning Network and I'm sure there are use cases for it too. I'm merely pointing out that such services are definitely not free and it obviously is centralized, for example it already doesn't accept users from a bunch of countries because it is centralized and has to comply with some arbitrary laws.

Yeah, it's a temporary solution while we have fiat around the world.

This is basically a worldwide fiat transfer service, streamlined. It would probably cost you more if you try to do this manually (deposit fiat into exchange in country A, buy bitcoin, send bitcoin to country B, sell bitcoin, withdraw fiat)

Absolutely.

Bitcoin native is of course the better way of doing things. But we're still not there yet, this is a temporary solution.

Also, this is a different use case. Here you are transferring fiat. With bitcoin you would have to manually deposit your fiat into an exchange, buy bitcoin, send it, and then the person in the other country has to login to an exchange, sell bitcoin, then withdraw to their own bank. All that has a lot of costs. This application basically streamlines all that.


Yes, there is a cost in the transformation of fiat into bitcoin and back. That's probably where Strike makes some money. Still this is cheaper than western union and others.

I wonder if it would ever be possible to have a system in which this exchange is basically free. The fiat part makes it very complicated.


Fair enough, it's probably still cheaper than the alternatives.

And also, it would be even better to transfer bitcoin natively, but this is a different use case, this is a transfer of fiat worldwide through the lightning network. It's a service basically. And as I mentioned before, if you replicate this transfer of fiat manually through an exchange on each country, you will probably end up paying more than Strike.


You could ignore the company 100%, what I find interesting is that basically there are starting to appear applications built on top of the lightning network, that's the interesting part.

This is basically worldwide transfer of fiat using lightning as the transfer layer. That's the interesting part, not the company itself.

There will be other companies offering something like this anyway.

I have a feeling swift (or a rebranded version) will be integral to many countries CBDC's. If not all.

I am a huge fan of the lightning network and what it aims to achieve. I run a c-lightning implementation.

Nonetheless, layer-2s such as this will be targeted by many governments because of its aims to replace their currency as the medium of exchange.

It is neither slow nor expensive to make on-chain bitcoin transactions!
Here is $67,715 moved 3 days ago instantly on-chain using $0.05 fee.
https://blockchair.com/bitcoin/transaction/e4a11cbc0c1b5e17c7c0e88be0ba946f2f625183a4d4075a5d1e8502838d124c

Generally speaking converting from and to fiat costs an additional exchange fee that makes the whole process of sending money using bitcoin "extremely expensive and slow".

It is definitely not free.
FYI Strike charges between 0.1% to 0.3% and they set the exchange rate so it could be higher which in my experience it usually is. For example if price is $49,310 right now your buy price would be $50,100 and your sell price is suddenly $48,200 and they also charge that 0.3%. And that's the best case scenario, services like this give you worse rates if the amount is lower. For example for $10 you may get $52,500 and $46,000.

After all the company isn't offering services out of the goodness of their hearts! They are here to make profit.

I don't know why this whole topic feels like an advertisement

It is still a centralized way because of the FIAT gates unless you can spend the satoshis directly. (Not everybody is lucky enough to be an El Salvador citizen ) Since most people will have to convert the coins to USD or their local currency, the FIAT gates will act like the swift nodes. So it doesn't actually solve much. Just an unofficial and cheaper alternative to swift which is cool as long as it lasts.

That's quite interesting! Lightening network is actually very handy when it comes to speed and scalability of bitcoin network. We all dream about bitcoin getting accepted in merchant stores worldwide,  LN and Strike can actually make it happen for real. It is solving to major issues for both merchant and consumer -

1. Value transfer without the risk of volatility
2. Almost instant transaction

These two issues are actually the pain for both side of a transaction when it comes to regular and frequent payments. It seems Strike can become the next Stripe or Square!

I just watched Jack Maller's presentation Bitcoin: Disrupting Cross Border Payments - IMF Fintech Seminar and found it very interesting.

Basically Strike is using the lightning network as a way of transferring fiat money all around the world, instantly and basically for free.

The concept of moving fiat through lightning is really interesting, as it's a really great use case of Bitcoin, and it's really independent of the price.

An example they show is a user in the US that wants to send $10 to El Salvador.

The legacy way of doing this would be something like transferwise, western union, etc. Extremely expensive and slow.

Instead, what Strike does is it converts the $10 into Bitcoin, then transfers it to a wallet in El Salvador, which converts the Bitcoin back to the $10.

Since there's basically no difference in price as it's almost instant, the full value gets converted into the receiving end in their preferred fiat currency, immediately.

This is a game changer, specially when Strike is available in more countries.

You will be able to send, for example, USD from the US to euros in The Netherlands for free, instantly.

The key thing is that as a user you don't interact directly with Bitcoin. It doesn't matter if Bitcoin is up or down, you still send and receive fiat for free all around the world, instantly. You also are not selling or buying any bitcoin yourself, you're just transferring fiat. I guess exchanging into other currencies might be taxable, and that's probably why they only have El Salvador and the US as available for their clients(both use USD).

Just for curiosity I checked how many SWIFT "nodes" there are, and found out that there's only about 11 thousand, much less than Bitcoin nodes out there, which are around 50k+, and also less than the ever growing lightning nodes, which are now about 17k+.

These kinds of applications that are starting to run on top of lightning are extremely interesting.