Fold's app allows users to pay for Uber rides via Bitcoin's Lightning Network.Fold
Today, Fold has announced the integration of Bitcoin’s Lightning Network in their app that helps users spend the cryptocurrency at Amazon, Starbucks, Uber, and other major retailers. Unlike another retail-focused crypto payments app announced earlier this year, Fold is focused on sticking to Bitcoin’s roots and allowing their users to avoid issues associated with the legacy financial system such as Know-Your-Customer (KYC) restrictions and mandatory signups.
The Power of Lightning
Longtime Bitcoin users will remember Fold as one of the earliest startups built around the peer-to-peer digital cash system back in 2014. Back then, the app’s main functionality was allowing its users to save 20% on their Starbucks coffees by paying with Bitcoin. However, the company eventually ran into usability issues a few years ago as the Bitcoin network became congested and on-chain transaction fees rose to levels unsuitable for Fold’s use case.
“We noticed very quickly that Layer 1 was not going to be the ideal payment rail that we hoped,” said Fold CEO Will Reeves when reached for comment. “Long confirmation times and, especially, high on-chain fees made it unworkable for most consumer and retail situations. Because of those challenges, we've been very proactive in adopting and building on Layer 2 solutions, like Lightning, as early as we could so we could actually make bitcoin payments work.”
As a quick overview, the Lightning Network is a secondary payments layer built on top of the base Bitcoin network that allows users to transact with each other directly rather than publishing all transactions to the blockchain. This enables Bitcoin payments that are faster, cheaper, and potentially more private (see this previous post for a more thorough walkthrough of the Lightning Network and its possible implications on the cryptocurre...