Former PayPal President on Bitcoin’s Future in Global Payments

David Marcus, an American entrepreneur, has a rich history in the fintech space. He was the co-creator of Diem, a cryptocurrency project initiated by Facebook, and has served as the president of PayPal as well as Head of Messenger and Head of Novi at Meta. As of May 2022, Marcus is the co-founder and CEO of Lightspark, a cryptocurrency startup focused on Bitcoin and the Lightning Network.

Lightspark is built on the Lightning Network, a Layer 2 payments protocol for Bitcoin. The Lightning Network enables near real-time transactions, is highly scalable, and offers privacy features that distinguish it from Bitcoin’s Layer 1. While the Lightning Network is powerful, it is also highly complex and presents a barrier to entry for many users.

Lightspark aims to simplify this complexity by providing an enterprise-grade entry point, allowing developers and platforms worldwide to tap into the benefits of a real-time global payment network easily and quickly. With a business model similar to AWS or other SaaS cloud-based businesses, Lightspark charges a small fee for transactions conducted through its platform. At scale, this amounts to approximately 15 basis points with no minimum fixed fee. The startup targets developers, wallets, exchanges, and OTC players, focusing on empowering developers to build new and innovative experiences.

On September 11, 2023, Marcus appeared on CNBC’s “Squawk Box” to discuss Lightspark’s mission. According to Marcus, the startup aims to transform Bitcoin into a global payment network. He highlighted the ease with which people can communicate globally via email, text, or video chat but lamented that sending money across borders is still challenging. Marcus compared the current state of global payments to the “fax era,” indicating that it’s outdated and needs to be modernized.

When asked about the limitations of existing payment methods like Venmo, Marcus said these services are not universal. He explained that sending money to them becomes a complicated process if a person is not using the same fintech apps or is an international tourist. Marcus emphasized the need for a universal protocol for money on the internet, which he believes current systems lack. He also pointed out that sending money internationally often involves cumbersome processes like walking to a bank branch and paying a fee.

Discussing the Lightning Network, Marcus stated that it allows for off-chain transactions that are later settled back on the Bitcoin blockchain. This, according to him, makes transactions faster and more cost-effective. Marcus described the Lightning Network as a “net settlement layer” that can facilitate real-time, cash-final, low-cost transactions between different currencies.

Marcus mentioned that the global payment network is a “ginormous” business involving trillions of dollars of transactions that transit through SWIFT and other payment networks. Regarding Bitcoin’s valuation, Marcus said that Bitcoin itself might not be the currency for everyday transactions, but fragments of Bitcoin on the Lightning Network could serve that purpose.

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