Company Name: spark of light
Founders: David Marcus, Kevin Hurley, Christina Smedley, James Everingham, Christian Catalini, Jay Massari and Tomer Barrell
Date of Establishment: April 2022; Series A May 2022
Headquarter Location: Los Angeles, California
Amount of Bitcoin in the vault: Unavailable
Number of Employees: 45
website: https://www.lightspark.com/
Public or private? private
Kevin Hurley and his team at spark of light We want to make it easier for institutions and everyday people to transfer value via Bitcoin.
That’s why they created Lightspark, Lightning Service Provider (LSP) – And more – it provides the enterprise-grade infrastructure that enables businesses around the world as well as those businesses’ customers to make payments globally using the Bitcoin Lightning Network.
“We want to continue the vision that we originally had with Diem, which was to really open up the financial world, and turn it into something where you can send money as easily as you send data packets today,” Hurley told Bitcoin Magazine.
Hurley also shared why the team at Lightspark chose to build on Bitcoin.
“One of the lessons from Diem is that you really need something that is truly decentralized, something that is a neutral protocol, and something that has a lot of liquidity,” Hurley explained. “Those are key aspects of Bitcoin and part of what makes Bitcoin so special.”
How does Lightspark work?
Lightspark considers itself more than just an LSP because it offers: Software Development Kit (SDK)Liquidity management via routing nodes, cloud-based node architecture, and API services that vendors can use to build certain features or leverage certain services.
The Lightspark SDK allows customers to easily access the Lightning Network to make payments without dealing with the hassles that typically come with using the network.
“We’re trying to boil down all the complexity of Lightning,” Hurley explained. “We talked to a bunch of companies that have been in Bitcoin for a long time and tried to understand why they didn’t use Lightning or why they tried to abandon it, and we heard a similar refrain from all of them — it was too complicated.”
To use Lightning without a service provider, businesses typically need dedicated staff to manage and rebalance liquidity in their Lightning nodes. With Lightspark, businesses only need to use a few lines of code provided by Lightspark to get started using the Lightning Network for payments. Lightspark takes care of all the technical details on the backend. Additionally, Lightspark offers other features that enterprises may find particularly useful.
“We’ve built compliance features on top of our stack,” Hurley said of how Lightspark helps businesses stay compliant. FinCEN Travel Rules.
“We’ve built AI on top of our stack to make payments very successful. We have Predict, which is like Google Maps for Lightning. (It shows us) where traffic is backing up to help us route transactions more successfully. Then we start adding things like UMA or Universal Money Addresses, which allow you to send from any currency to any other currency,” he added.
Universal Money Addresses (UMA)
One of the most notable features that Lightspark has designed and made open source is UMA.
With Lightspark, businesses can offer their customers a global financial address, a combination of: Cash Touch App $cashtag And E-mail address (For example, $yourname@yourwallet/bank/exchange.com).
UMA allows users to seamlessly send crypto or fiat currencies, albeit in a hedging manner.
Hurley explained how UMA was built on the foundation of compatibility with To Norel And Lightning addressesThe difference between LNURL and UMA is that UMA can be used to send funds in its own unique way.
“You can move from any currency to another using UMA,” Hurley shared.
“Let’s say I’m coming from Brazil and I want to send money to someone in Mexico. Maybe I’m visiting Mexico and I go to 7-Eleven and I want to buy something. I need to be able to send from my local currency to Mexican pesos,” he added.
“With UMA, what happens is that my Brazilian Real is instantly converted to SAT. It goes through Lightning and instantly converts from SAT to Peso and is paid to 7-Eleven.”
Part of the reason such transfers can happen legally is that UMA facilitates the exchange of compliance data between the various organizations Lightspark works with, which are located all over the world.
The exchanges, digital banks, and other institutions that partner with Lightspark – all of which are regulatory custodians of Bitcoin/cryptocurrencies – have the appropriate money transfer licenses in their respective jurisdictions, keeping Lightspark and its partners in compliance with the above travel rules.
Lightspark Partner Organizations
Lightspark has been making headlines recently, signing deals with major institutions like Coinbase, Xapo, and Nubank, and with each new partner joining, more potential partners are becoming interested.
“They see the growth — especially when we join Coinbase — and a lot of entities have come to us and been interested in what’s going on,” Hurley said.
“They see that the big players are starting to pay attention to this space and they see a lot of transactions in it, and they want to participate as well. They don’t want to be left behind because they realize that this space is growing and becoming very important,” he added.
At the moment, interest is coming from more technologically advanced digital banks, which want to offer services that differentiate them from traditional banks. However, Hurley noted that major traditional banks are also showing interest.
“The benefit (of Lightspark) applies to JP Morgan as much as it does to Nubank,” Hurley explained.
“We’ve dealt with a lot of them. And often times, they’ll need to see others do it first,” he added.
“Once they start seeing real adoption, I think there will be rapid adoption on their part as well.”
Hurley also noted that there are good reasons for some larger traditional financial institutions to join the project.
“Traditional financial firms have significant pain points,” Hurley explained.
They may have bank accounts in multiple countries, and even within their own bank, it takes days to transfer money because they are transferring using Swift“They go from one entity in Argentina, for example, to another entity in Europe, and it takes three to five days to transfer the money. That means they have to set up correspondent banks. That’s a huge burden for them and can be very expensive,” he added.
“I think they’re very excited to see something that can run faster, more efficiently and have better rails. It’s a positive for everyone.”
Bitcoin bullish, but aware of reality
While Hurley and the Lightspark team believe that Bitcoin adoption will continue to grow, they are also well aware that many people around the world still feel uncomfortable using Bitcoin.
Hurley sees Lightspark’s approach as a way to boost Bitcoin adoption, while keeping in mind where the customer is coming from.
“In order to get real adoption and continue to grow adoption, you have to meet consumers where they are, and a lot of consumers right now are comfortable with fiat currency,” Hurley said.
“These people probably don’t know anything about Bitcoin, and it’s going to take some time before they can learn about it. So if you can strip them of that information, and let them use the currency they feel comfortable with, that will help attract people to the currency and drive adoption,” he added.
However, Hurley also acknowledged that there are others who would prefer to simply use Bitcoin and eventually use it without custody before explaining that Lightspark and its partners allow users to send Bitcoin to a non-custodial wallet if they wish.
“Users can exit guardian at any time and move to non-guardian,” Hurley said.
He then explained that neither Bitcoin nor Lightning currently has the ability to bring the masses to the network in a non-custodial way, which is why companies like Lightspark and the companies they partner with are important now.
“You can’t integrate billions of users into Bitcoin and Lightning today (without custody),” Hurley explained.
“It may be possible in the long term, and we are doing a lot of exploration into how to achieve that, because we feel it is vital to the ecosystem,” he added.
But for now, Hurley sees custody solutions offered by companies like Cash App, Coinbase, and of course Lightspark, as a way to encourage people to use Bitcoin in a non-complicated way.