The real reason why Jack Dorsey – co-founder of Twitter – invested in Lightning network

If you have been following the Bitcoin news lately, you would have heard that Jack Dorsey has invested $3 Million in the development of Lightning network. Why would he do that? Take a moment to think….

The answer: his company Square. For all those who don’t know what Square is, it is a mobile payment company co-founded by Jack Dorsey which is hugely popular among small and medium size merchants.

So how do Square and Lightning tie up? *Drum Rolls* Bitcoin-based payments.

Square and BitPay (bitcoin based payment company) are coming to a partnership to allow small and medium merchants to start accepting Bitcoin as payment. But accepting Bitcoin as a payment for small transactions would be a not so profitable process. Firstly, Bitcoin based transactions would be slow and secondly, the per transaction cost would outweigh the service/product cost. These two factors make Bitcoin really bad for Micropayments.

Lightning Network combined with Segwit changes that to some extent. It speeds up the transaction and decreases the cost per transaction, which makes Bitcoin feasible for micropayments. This is where Jack Dorsey comes to the picture. By funding the Lightning research team, he is trying to make Bitcoin based micropayments possible.

There you go, the real reason why Jack Dorsey is funding Lightning research.

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