Former PayPal president, David Marcus, recently stated in an interview with CNBC that while information can be easily transferred over the internet, global payments remain stuck in a “fax era”. Marcus, who is also the co-founder of Bitcoin Lightning-focused payment service Lightspark, believes that the Lightning network could be the solution to the cumbersome process of sending money across jurisdictions.
Marcus compared the ease of communication through email and messaging to the lack of a universal protocol for transferring money online. He highlighted the fact that if someone wants to communicate with another person, they can simply ask for their email address and send a message within minutes. However, when it comes to sending money, especially to non-U.S. citizens using different fintech apps, the process becomes complicated.
To illustrate this point, Marcus explained that to send money to a non-U.S. resident, one would need to obtain their bank account number and physically go to a local bank to make an international wire transfer, which typically costs around $50. Additionally, if the transaction is attempted after Friday at 5 pm, it becomes impossible to complete until the following week. These limitations highlight the outdated nature of global payments.
In response to this problem, Marcus’s company, Lightspark, is focusing on leveraging the Bitcoin Lightning network to improve and simplify cross-border money transfers. He believes that Bitcoin’s Lightning network will not be primarily used for everyday purchases, but rather for overseas transfers. The goal is to enable the seamless transfer of U.S. dollars to recipients all over the world, who can then receive the funds in their local currencies, such as Japanese Yen or Euro.
Bitcoin’s settlement layer, combined with Lightning’s real-time payments, offers secure and fast transactions at a low cost. Marcus emphasizes that this combination provides cash finality, a guarantee that the payment is settled, making it an ideal solution for global payments. By leveraging the Lightning network, Lightspark aims to revolutionize the way people transfer money across borders, bringing the process into the modern era.
In conclusion, Marcus highlights the disparity between the ease of transferring information over the internet and the outdated methods of global payments. He believes that Bitcoin’s Lightning network has the potential to bridge this gap and revolutionize cross-border money transfers. With Lightspark’s focus on leveraging the Lightning network, they aim to simplify the cumbersome process and enable seamless and cost-effective global payments. Through these efforts, they hope to move away from the “fax era” and embrace the modern capabilities of the internet.
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