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The Bull Case for Statechains & Why Big Tech Wants Self-Custody Too | with Kevin Hurley
Episode 39
It was about four years ago that Facebook’s famous effort at creating its own cryptocurrency and crypto-native payments system (Libra, then Diem) was effectively halted by an unending stream of regulatory scrutiny and compliance blocks.
Some leaders of the project went on to create crypto-projects of their own (e.g. SUI and Aptos), however, “Head of Facebook Financial” @davidmarcus, along with Diem wallet technical lead Kevin Hurley made the key bet that Bitcoin’s decentralized rails were the only in the crypto space likely to be undisrupted by regulatory roadblocks longterm.
They went on to create Lightspark - initially designed to make Lightning “usable” by enterprise payments companies - but ultimately came to the conclusion that Lightning alone was not going to scale to 8 Billion people globally.
After heavy research on scaling solutions for Bitcoin, they eventually developed a “statechains” layer-2 solution of their own Spark – which, since going live, has garnered attention from Ordinals degens to enterprise payments companies alike.
In this episode, Kevin Hurley and I get into:
— How the Libra/Diem regulatory blocks went down and why these concerns will likely only be addressed by a truly decentralized system like Bitcoin (+ self-custody on the wallets side)
— Why Lightspark started building on the Lightning Network (raising more than 2X field leader Lightning Labs), but developed serious concerns about its ability to scale
— What a multi-system Bitcoin scaling future might look like: with Lightning as the liquidity provider feeding self-custody friendly systems like Spark, Ark, e-cash systems, and more.
—What a multi-system Bitcoin scaling future might look like: with Lightning as the liquidity provider feeding self-custody friendly systems like Spark, Ark, e-cash systems, and more.
Bitcoin Rails is powered by:
— Best In Slot (@bestinslotxyz) – the leading API for Ordinals and BRC-20 data aggregation and indexing
— Spark (@lightspark) – a Statechains implementation leading the path toward institutional adoption of Bitcoin-powered payments
— Citrea (@citrea_xyz) – the leading Bitcoin rollup technology and contributor to the BitVM alliance
📌 Timestamps
00:00 Intro
00:26 How Lightspark came to life
03:41 Lessons from Libra and Diem
08:35 Universal Money Addresses and global payments
13:45 How traditional finance is approaching blockchain adoption
33:08 The core challenge of Lightning
37:53 Exploring alternatives: ARC and Statechains
40:18 How Statechains work and their benefits
56:43 The future of Lightning and Spark’s role
Published on 1 week, 2 days ago