Cash App Integrates with Bitcoin Lightning Network for Limited Users First
Cash App was launched by Block Inc back in October 2013 but added Bitcoin trading services only 5 years later, in 2018.
Cash App, a financial platform developed by Block Inc (NYSE: SQ), has announced that its payment infrastructure is now integrated with the Bitcoin Lightning network. As a result, Cash App users can now send and receive Bitcoin at a negligible fee, although on a limited basis. According to the announcement by Cash App, users can send or receive payment of up to $999 in Bitcoin every seven days using the Lightning Network.
Bitcoin Lightning Network Integrated by Cash App
The Bitcoin Lightning Network is a layer 2 (L2) scaling solution that has existed for the past few years. Notably, the Lightning Network has around 87,000 payment channels and 4,570 BTC locked in. However, the adoption of the Bitcoin Lightning network has been slow compared to the sheer BTC daily traded volume.
“To receive Bitcoin with the Lightning Network, the sender doesn’t need a Cash App account to pay your request, but they will need a Bitcoin wallet with Lightning-enabled. This feature is not available to customers in New York,” Cash App noted.
Cash App and Its Market Outlook
Cash App was launched by Block Inc back in October 2013 but added Bitcoin trading services in 2018 only. A year later, the company added support for stock trading services for its United States customers. The past year has seen SQ shares drop significantly, approximately 77 percent, according to MarketWatch statistics.
However, the market decline has not kept Jack Dorsey and his colleagues from building in anticipation of a profitable future. Moreover, Dorsey is ready to ditch Twitter Inc (NYSE: TWTR) and focus on Block Inc and its services.
Notably, Elon Musk is in the final stages of acquiring Twitter for a whopping $44 billion, following months of push and pull with the latter’s legal team.
In September 2021, Cash App reported 70 million annual transacting users and $1.8 billion in gross profit. The company competes with the likes of PayPal and Venmo, Apple Pay, Google Pay, and Zelle. By charging a 1.5 percent fee for immediate transfer, Cash App expects to have the upper hand in market competition.
Furthermore, Cash App does not require confirmation on the blockchain, unlike other platforms that take time before executing transactions.
Cash App’s primary revenue stream comes from users withdrawing funds from the app to their linked bank accounts. The platform reduces the 3-5 business day wait by charging a 1.5 percent fee, which has proved to be a successful business model.
Additionally, the company generates revenue by lending money deposited by users to various institutions, thus charging interest.
In a bid to widen its services and revenue collection, Cash App acquired Credit Karma Tax, a free do-it-yourself tax-filing service, for $50 million.