'Only Bitcoin': Why Ex-PayPal, Meta Leader Marcus Is Going For The Lightning Network?

Interview source | Bitcoin Magazine

Compilation of the original text | Baize Research Institute

For nearly 25 years, almost as long as online payments have had the chance to become a reality, David Marcus has been trying to figure out how to make it happen.

In the mid-90s, he founded a telecommunications company that provided Internet access and telephone service. In 2000, he founded Echovox, which he spun off into Zong in 2008, a mobile platform that lets users pay online directly from their mobile phone bills. When Zong was acquired by PayPal in 2011, Marcus joined the latter and became its president the following year.

In late 2008, Satoshi Nakamoto released the Bitcoin white paper, and Marcus read it shortly after, but didn't "fall down the rabbit hole" at first. Then, in 2012, when Argentina ordered PayPal to stop all transactions sending money out of the country due to monetary inflation and austerity, the true value of bitcoin, the peer-to-peer electronic cash system, began to resonate with him.

"We have to comply because we are a regulated entity," Marcus explained. “That day, the price of bitcoin went up a lot, and I was like, wow, like in a place like Argentina, consumers are buying a lot of bitcoin as a way to move the money they’re making. So, I think it was an eye-opening moment for me because Bitcoin can be a valve to escape certain behaviors that are not consistent with my view of money. So this is a turning point for me in 2013, it really Strengthened my faith."

Not long after, in May 2013, he attended the Bitcoin 2013 conference in San Jose, California, where he was excited about the breakthrough in how Bitcoin could facilitate digital payments, even though the Bitcoin community was still small at the time. interested.

"It was unbelievable that there were only a few people there," he said. "I was fascinated by the vision of bitcoin, where you could transfer value in a completely autonomous way without any intermediaries. At that time, I set up bitcoin wallets for my friends and showed them: ''Look, this I send you the money, no middleman, right?’ I’m really hooked on it.”

Libra was once close to adopting the Lightning Network

But Marcus is not ready to abandon institutionalization and accept the possibility of this open internet payment. In June 2014, he joined Meta (formerly Facebook) as Vice President of Messaging Products, responsible for developing the Facebook Messenger App. Marcus released Messenger P2P Payments in 2015, allowing users to send money to other people from their bank accounts.

Time came to mid-2019, and Marcus began leading Facebook's cryptocurrency project Libra, which was later renamed Diem and then abandoned entirely. Compared with other centralized digital currency projects, Libra has been "criticized" by almost all Bitcoin supporters because it does not provide anything particularly valuable. Marcus also had to defend the project before the House Financial Services Committee and the Senate Banking Committee, and was forced to answer questions about Meta's past violations of user privacy.

But before Libra decided to use traditional financial institutions as its network nodes, Marcus had actually considered adopting the Lightning Network.

“I remember meeting Elizabeth Stark (CEO of Lightning Labs, the Lightning development company) in early 2018 and trying to figure out if Lightning was actually the way to go, because if there was a way to have Bitcoin’s intermediaryless Attributes and increasing transaction velocity, I really want to do that," Marcus said. “At the time, we thought, okay, maybe we can use the Lightning Network and then build a world-class wallet that we can embed into all Meta products, including WhatsApp and Messenger, and then enable people to transfer value easily.”

Ultimately, though, he felt the protocol wasn't strong enough to realize Meta's vision, as it had some shortcomings that had yet to be overcome, including limited nodes and liquidity.

Markus pointed out: "Even today, it will be challenging for the Lightning Network to actually reach billions of consumers. Even Layer-1 does not have enough HTLCs (Hash Time Lock Contracts) to really Do that. So we need to build this proprietary technology and then decentralize it as much as we can.”

In the end, Marcus's dream of realizing "distributed payment" in a giant company ended with Meta's disbandment of Libra, but he has realized that trying to achieve global payments on any other blockchain network except Bitcoin It is futile.

“At this point, I have established an unshakable belief that the only blockchain and underlying asset that can support a truly open internet payment protocol is Bitcoin and nothing else,” he said.

(Translator's Note: This view of Marcus coincides with Jack Dorsey, the former CEO of Twitter. Dorsey leads the payment company Square, holds 8,027 bitcoins, currently worth about 207 million US dollars, and later changed his name For Block, fully develop the Bitcoin product matrix and focus on Bitcoin. "Holding Bitcoin and empowering it" has become the purpose of Block, and "Bitcoin is the best native currency of the Internet" is Dorsey's struggle Target.)

In 2021, Marcus left Meta and founded Lightspark the following year to realize this belief.

Why Bitcoin and Lightning are better

Lightspark is focused on building software and development tools designed to make accessing the Lightning Network easier, such as an SDK to help businesses offer Lightning wallets to their customers, and Lightspark Predict, which identifies the best performing Lightning Network nodes and Transactions are routed to them.

Rather than building a centralized platform to support Lightning Network payments, Lightspark is focused on building tools to help customers access existing Lightning Networks. While the Lightning Network’s adoption rate is still nowhere near that of payment giants like PayPal, Marcus is optimistic about its potential to scale.

“There are still issues with the current Lightning Network, but my team and I are very confident that we can fix them,” he said. “You see, for our customers, the companies that use the Lightspark service to integrate the Lightning Network, you don’t even need to worry about channels and liquidity and minimum fees or maximum fees to set. All these complexities will be completely removed by us.”

When asked whether abstracting users from managing their own liquidity, channels, and routing would in some sense reproduce the centralized, trusted financial intermediary, Marcus used an analogy to answer.

"In the early days of the internet, if you wanted to do a website, you had to build your own server, buy a router and configure it yourself, and then maintain the whole thing," he explained. “But the reason why Lightning and Bitcoin are better is because there are companies like Lightspark that are trying to make mass market adoption easier. No matter what country you are in, as long as you have an Internet connection, you can be on your network. Run a node, become a participant in the Bitcoin network. I think that’s what makes Bitcoin amazing.”

He further emphasized that his intention now is to achieve some kind of Lightning Network adoption rather than launching a new solution.

"We don't want everyone using our service," he continued. “It’s actually a bad thing for widespread adoption, right? We think every company should run their own business, so we’re going to cater to enterprise customers in the Lightning space.”

Of all the entrepreneurs/executives actively working on Bitcoin projects, Marcus has probably the most experience telling him what it takes for Bitcoin to succeed, and what must be avoided in order not to fail. And, he claims that building on the Lightning Network is the culmination of his life's work, and he's determined to succeed.

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