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Why Xapo Bank chose to integrate the Lightning Network with Lightspark


Xapo Bank's collaboration with Lightspark marks a groundbreaking venture, empowering people to fully harness the immense potential of Bitcoin and blockchain technology, wherever they are. This partnership, highlighted in a conversation between Xapo Bank Product Owner Anton Iribozov and Lightspark, represents a significant step in making sending and spending Bitcoin simpler and safer.

Read on as we delve into the history of our pioneering partnership with Lightspark and explore what it means for the everyday use of Bitcoin.

Lightspark: Xapo Bank has been a relatively early adopter of the Lightning Network. What insights led Xapo Bank to integrate the Lightning Network?

Anton Iribozov: For us, Lightning Network isn't just about instant transactions with near-zero fees—it symbolises the leap forward in Bitcoin technology. Xapo Bank was established over 10 years ago with the laser-focused mission to increase Bitcoin adoption. We envision a world where Bitcoin will be held by almost everyone. Lightning transforms the Bitcoin network by allowing people to use Bitcoin for everyday purchases, which is the ultimate step in fostering its adoption. We believe that providing everyday access to Bitcoin through the Lightning Network, combined with the robust infrastructure of a regulated bank, is a crucial step toward achieving mass adoption.

Lightspark: Broadly speaking, what do you think is the most common misunderstanding of the Lightning Network? How about from an engineering perspective?

Anton Iribozov: The first misunderstanding is that integrating and maintaining the Lightning Network is too challenging from an operational and engineering perspective. Thanks to our strong partnership with Lightspark, we were able to integrate and launch the Lightning Network in less than three weeks. 

Operationally, Lightspark offers a seamless infrastructure for maintaining Lightning transactions. Doing everything without a partner can be challenging, but working with Lightspark removed those challenges.

Revealing Lightning Complexity: Why Lightspark?

Lightspark: What were Xapo Bank’s initial explorations into the Lightning Network integration like? 

Anton Iribozov: We started by running our own node and exploring the payment success rate. We quickly realised that working with the right partner would be the most optimal long-term solution.

Lightspark: When considering Lightning Network integration, what are some of the biggest hurdles for someone wanting to run their own node?

Anton Iribozov: The initial setup of an own node can be a challenge, but the real work starts when this node has to be maintained. 

Lightpsark saves us a serious amount of operational work thanks to its infrastructure, allowing us to automatically rebalance our node. 

Lightspark: Lightspark solves quite a few complexities typical of the Lightning Network experience, like node management and network mapping, for example. From Xapo Bank’s perspective, which was the most appealing?

Anton Iribozov: We view Lightspark as a partner that not only takes care of the operational side of our own node but, most importantly, leads us towards the newest and most optimal Lightning Network upgrades, ensuring that we can deliver the best possible Bitcoin payment experience to our members. 

Lightspark: What was the integration process like with Lightspark? How might it have been different doing it on your own?

Anton Iribozov: Working with Lightspark allowed us to deliver Lightning network payments for less than three weeks, which is a very good achievement. Lightpsark guided us through the process and ensured our integration was the most optimal one. 

Lightspark: What does your infrastructure look like now? Were there any significant adaptations to your infrastructure to leverage the capabilities of the Lightning Network using Lightspark?

Anton Iribozov: Our current infrastructure is integrated seamlessly with the Lightspark platform, empowering us to deliver the ultimate user experience without investing too much time into development. 

Measuring success for Xapo Bank, Lightspark, and the Lightning Network

Lightspark: Now that integration has been finished, what sorts of performance upgrades might the typical Xapo Bank customer experience with Lightning Network deposits?

Anton Iribozov: In April 2024, Bitcoin transaction fees reached record levels of over USD 140 per transaction, which showed that when Bitcoin blockchain network congestion occurs, transacting Bitcoin can be very costly. 

Enabling our members to transact BTC via the Lightning Network will eliminate the risk of paying high transactional fees. Additionally, Lightning Network users can experience instant sends instead of waiting up to an hour if they’d made the transaction directly on the blockchain. 

Speed, together with ultra-low costs, are the main performance upgrades. 

Lightspark: How does Xapo Bank typically measure the success of its technological deployments? What would success look like for Lightning Network deposits?

Anton Iribozov: Simple. Overwhelming positive feedback from our members. Staying close to our members and constantly asking for feedback is how we evaluate the product's success. Of course, we also monitor the data. We expect a significant number of members to test the Lightning deposit flow and permanently use it to deposit funds to their Xapo Bank account. 

Lightspark: What are some of your hot takes on the Lightning Network? How might it be different in the next five or 10 years?

Anton Iribozov: We envision a world where Lightning Network adoption will constantly increase, making Lightning payments widely accepted across small merchants. 

As more and more people are looking to protect their savings from inflation by buying Bitcoin, we will reach a point where some groups of people will refuse to keep even a small portion of their savings in fiat money and fully switch to Bitcoin. The Lightning Network can enable those people to transact with their Bitcoins freely. 

About Lightspark

The Internet lacks a protocol for money. Lightspark is building the tools and services to make it happen. Lightspark builds enterprise-ready infrastructure for open payments for the Internet at scale using the Lightning Network. An always-on, low-cost, universal payment network will completely transform how money is moved, enabling businesses and developers to transform existing solutions and build new financial systems, services, and processes accessible to everyone, transcending geographical restraints. Lightspark is headquartered in Los Angeles, California, but serves the world.

*Capital at risk. This information is not investment advice. Crypto asset values can go up as well as down and you could lose all the money you invest. This is a high‑risk investment and you are not protected if it loses all or some of its value. Past performance is not indicative of future results.


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