Coinbase Highlights Potential Lightning Network Disruption to $150,000,000,000 Payments Industry

Crypto exchange Coinbase says the Lightning Network has the potential to disrupt the massive $150 billion payments industry.

Lightning Network is a Layer 2 scaling solution built on top of Bitcoin, aiming to enable instant and low-cost transactions for BTC.

In a new blog post, Coinbase says the Lightning Network is targeting a more real-world use case compared to much of the speculative-driven growth in smart contract platforms.

With Visa and Mastercard raking in around $24 billion in 2021 by collecting 2-3% of every transaction completed with their cards, Coinbase says the Lightning Network could be the innovation to undercut the world’s largest payment processors.

“From humble beginnings, the potential to transform crypto’s most valuable asset into a true medium of exchange has the power to bring greater financial inclusion to anyone with a smartphone. The ability to inexpensively route fiat transactions via Lightning Rails without users ever knowing they are using Bitcoin can disrupt industries worth over $150 billion a year.

Lightning can be to Bitcoin what Visa/Mastercard is to fiat currencies. The combination of a universally accessible payment network on top of the world’s first open-source protocol for money can help Bitcoin evolve into a true global reserve currency.”

Source: Coinbase

While Lightning has a lot of potential, Coinbase notes that adoption is still slow. In addition, Lightning must overcome the massive network effects of Visa and Mastercard.

“Lightning is still cumbersome for new users and merchants. Additionally, onboarding low-income users in developing countries remains a major challenge to fulfill the promise of Lightning transfers.

Finally, a lack of compliance and regulatory frameworks limit the ability for existing payment and banking service providers to accommodate and serve a global customer base.”

Coinbase says we can expect developing countries with high inflation and “more smartphones than bank accounts” to lead the way should Lightning Network roll out meaningfully.

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