On Thursday, September 23, 2021, Twitter continued its spate of new feature announcements with Tips, its new tipping feature.
This doesn’t come as much of a surprise as the microblogging platform tested a similar feature — Tip Jar — back in May.
While Tip Jar was limited to people using Twitter in English, including journalists and experts, Tips is currently available on iOS devices and will soon be rolled out on Android devices.
It also supports more third-party payment platforms like African payments platform, Chipper Cash. Twitter users can now send money to others through their profiles.
Interestingly, the tipping feature supports sending and receiving flagship cryptocurrency, Bitcoin.
Twitter CEO Jack Dorsey — a staunch Bitcoin evangelist — once tweeted that it was only a matter of time before Twitter facilitated Bitcoin.
Twitter’s move to enable Bitcoin tipping through a wallet that uses the Lightning Network will speed up Bitcoin transfers. This could make the virtual currency more appealing, triggering wider adoption.
What is the Bitcoin Lightning Network?
Bitcoin’s Lightning Network is a route that eases Bitcoin transactions — off-chain — outside the Bitcoin network. It is basically a network that allows transactions to occur immediately and be recorded on the Blockchain later.
The Lightning Network was created to solve Bitcoin’s scalability problem. Asides from volatility, the slow speed of Bitcoin transactions makes them impractical for everyday transactions.
For context, Visa, a digital payments platform, claims it can handle 65,000 transactions per second. However, according to a news report by Bitcoin.com, it can only perform 1,700. Bitcoin, on the other hand, is only capable of seven per second — a staggering difference.
Bitcoin’s transaction speed is the price of decentralisation and security. Miners validate transactions on the network by solving complex math problems with powerful computer hardware, a process that ensures safety but takes time.
Bitcoin for daily transactions
The Lightning Network skips the miners and creates an off-chain or a direct channel between the sender and receiver. This will make Bitcoin tipping on Twitter immediate. According to Investopedia, “A lightning network channel is a transaction mechanism between two parties. Using channels, the parties can make or receive payments from each other.”
Once the channel is closed, the transaction gets added to the Blockchain. Therefore, a grocery shop that accepts Bitcoin can create a channel with customers to speed up transactions.
Speaking with Bloomberg, Strike CEO, Jack Mallers, says integrating the technology on Twitter will have far more implications beyond Twitter or even Strike.
“You’re talking about a monetary network that expands the entire globe and can achieve instant, nearly free global cash finality.”
“This is the beginning of a broader trend of companies using the world’s first global monetary network to interact with their users in a monetary fashion.”
Strike is also the wallet enabling the exchange of Bitcoin in El Salvador, the first country to make it a legal tender. While Strike solves the problem of speed, volatility remains an issue.
Speaking about this, Mallers says, “You can send and make Bitcoin payments with dollars and receive Bitcoin payments as dollars.”
Founder and CEO of MicroStrategy, a business intelligence and software company, Micheal Saylor, dubbed the technology the future of global payments.
Speed comes at a cost
While the Lightning Network offers immediate transactions at low fees, it also has its disadvantages.
According to Cointelegraph, offline transaction scams are some of the biggest challenges of the Lightning Network.
“If one participant in a payment channel chooses to close it while the other party is offline, the former can steal the funds.”
Payments also get stuck on the Lightning Network. And although they’re almost always refunded, this could take days.
Generally, cryptocurrencies and Blockchain technology are constantly going through improvements and innovation as they’re still relatively new.
Jack Dorsey has said Bitcoin would unite the world and bring peace; only time will tell if his prediction will come true.