Bitcoin Forum

Thanks to the Lightning Network, it's now possible for Bitcoin to provide instant, cheap transfers to everyone. Adoption for the off-chain scaling solution is low, in part because of the LN's complexity. Now, imagine an scenario where the Lightning Network becomes heavily adopted by people in the mainstream world. It could threaten the existence of traditional payment processors as we speak. While I don't know how much TPS the Lightning Network is able to process, I'm pretty sure it's near close as VISA.

Do you think the Lightning Network will be able to challenge VISA someday? If not why? What if traditional payment processors like PayPal, VISA, and Mastercard decide to run a LN node in the future? Will this benefit Bitcoin in the long run or not? Your input will be greatly appreciated. :)

To answer this question we must understand how LN works and why the transactions are instant.

To make transactions with Lightning Network the business that want to accept LN payments needs to create some kind of 'channel', so, let's say you have a hosting business and you are accepting Lightning Network, then you create a channel with 0.1btc. So, when a client pay to you the service of 0.002btc now your 'channel' will have 0.098 available for LN. Once the channel gets full then it broadcast a transaction in the bitcoin blockchain to confirm all the LN transactions in one real transaction on the blockchain.

Now you can see the problem with replacing VISA. The transactions are instant but the community needs those channels to spend with LN, so, my answer is a big NO. Lightning Network can't replace visa.

VISA has some of the biggest dedicated data centers engaged in all those rapid transactions over a centralized network. While the thought of having LN takeover Visa is tempting, it is really difficult for a network of voluntary, bootstrapped nodes with several bottlenecks to surpass the processing capabilities of dedicated hardware like the ones that companies like VISA employ.

LN by itself should be quite good for those of us who want to use BTC. While its a nice thought experiment, it isn't quite possible for even LN to change the status quo on this one.

The answer to that question will be highly dependent on the mass adoption that will happen to Bitcoin (if it ever happens). Visa as of 2019 recorded (https://www.statista.com/statistics/261327/number-of-per-card-credit-card-transactions-worldwide-by-brand-as-of-2011/) around 185 billion in transactions if we count other card providers like Unionpay and Mastercard you will get 131 billion and 108 billion transactions, respectively. Now I don't have the number for LN related transactions but assuming that it is an equivalent amount in the Blockchain which is 325,000 transactions daily you will get 118.63 million transactions daily which is just a small fraction as compared to number of Visa related transactions. Comparing it to Visa and the other related parties Bitcoin still is a long way of even matching their daily us and I think we all know for it to happen mass adoption is something we need to look at.

Lightning Network is Bitcoin. For Bitcoin to challenge Visa, a lot of other factors need to be resolved too, not just the scalability. Price volatility is a problem, as unstable money is impractical for business. Bitcoin is not fully recognized by governments and their stance could change at any time. Most importantly, majority of people does not see benefits in using Bitcoin as money - banks work quite well and smooth for most people, on average their user experience is far better than Bitcoin's. Bitcoin's main goal is to let people control their money, but this is not what most people are interested in.

The "mainstream world" you're referring to, will never adopt the Lightning Network, because they'll never adopt bitcoin generally. The mainstream people are enough with Visa, they don't need anything more. The Lightning Network helps us. The bitcoin adopters. It is here to revive bitcoin as a medium of exchange.

But it can't replace Visa, because besides the "mainstream" argument, Visa provides something LN doesn't. Instant transaction with nearly zero fee for one-time-purchase. If you want to just buy a coffee, it won't benefit you to use LN. You'll have to broadcast two transactions on the blockchain, that's a ton of money on fees. You'll use Visa, because after all, you don't want to make another transaction with the seller.

For what community are you talking about? Once you make a LN transaction, any party can broadcast it at any time as long as the node is online. So even if one of them does not remain cooperative, the other can close the channel and every party will receive the final balance of their signed transactions.

The main issue is price volatility. This could be attributed towards the lack of regulation and low liquidity on the crypto market (compared to the traditional stock market). Volatility is linked to the price of Bitcoin relative to Fiat. But what if people use Bitcoin as a unit of account? Then, 1 Bitcoin would be equal to 1 Bitcoin no matter what. If we start to value things based solely on Bitcoin, volatility would no longer be an issue. People would just pay any amount in Bitcoin regardless of its current price on the market. Yet, this hasn't happened as the world moves around Fiat these days.

As far as the Lightning Network is concerned, I think it has all of the capabilities of surpassing VISA in terms of TPS. What's limiting the LN to go full speed ahead is the lack of mainstream adoption. Not to mention, the LN is limited to Bitcoin's own transaction capacity. After all, LN channels are opened/closed on the Bitcoin blockchain itself. With a limited block size of 1MB, the LN will not be able to expand towards new heights. The constant opening/closing of LN channels on the Bitcoin blockchain will only make matters worse in the long run because of the block size limitation. Who knows what will happen with Bitcoin in the long run as it becomes more popular in the mainstream world?

Nonetheless, the LN is nothing more than an experiment. Besides years of research and development, the off-chain scaling solution is still in its infancy. It won't be able to overcome VISA if progress remains slow. At least, people have a choice to skip high fees and slow transaction confirmation times on the Bitcoin blockchain. As I've said many times before, people could either choose the Lightning Network or an altcoin to enjoy fast transaction confirmation times and low fees. Time will tell us whenever the LN will be able to challenge VISA as a payment processor or not. Just my thoughts ;D

We should probably ask first if Lightning Network will be mass adopted before talking about challenging VISA. How do you expect it to challenge other platforms when the majority of the Bitcoin community do not even support it?

Those who are into altcoins with cheaper fees and fast transaction won't bother spending sats for opening channels.

So which one is it, it has the capability or it is limited  ;D
That block limit will most likely stay like that for years, I don't see anyone ever challenging it, and not a single of the current dev proposing this so it will all have to come from the capacity of the channels and finding a way to keep the coins spinning around in the network, which brings us the problem with the limited service offered, and so on and on.

But in the end, why does it have to compete on Visa's terms?
I don't think that we will have to soon the number of customers using bitcoin to rival Visa even with the capacity, what Visa has and bitcoin will never have with a 3rd party service is the easy usage for their cards. You swipe your card, payment in seconds, card accepted everywhere, you lose your card you have somebody to call, you have the funds in your linked bank accounts insured, those are things bitcoin will never be able to do.
And a lot if not the decisive majority will appreciate those more than being their won bank like a lot of them don't like this responsibility that comes with it.

Before bitcoin can challenge Visa there are a lot of things that need to change, with one of the most important being how people think and act, and this will take a while, maybe even a decade is an optimistic scenario.

Listing prices in BTC doesn't change the fact that BTC's value changes rapidly. USD isn't more stable than Bitcoin because it's used for goods and services, it's more stable because it's not speculative, since its fundamentals are much more predictable.


I don't agree that this is just an experiment. LN is already "unoficially" on the mainnet, there are no major obstacles that could make it a failure. Wide adoption of LN in Bitcoin community is a question of time.

I'm kinda under doubts tbh. Bitcoin was amazing back when only few were using it. Many coins seem great before they get congested, and then you find out they aren't as strong as they were supposed and presumed to be. I honestly think the LN is no different. At one point, having enough adoption, the mempool will be challenged even with LN widely adopted.

As I mentioned in a recent thread of mine, the problem is with the first layer and not with the second one. Bitcoin will need some changes before it can technically challenge centralized fiat convenience. But let's not forget that technical specs don't always mean similar results.

That's for the clarity on this. LN is mainly an off-chain bypass methodology which collects multiple payments and broadcast it to the bitcoin blockchain as a single payment.

I know LN is now officially released and we already have LN wallets available in the market. But it indeed has a long way to go before it becomes mainstream. For LN to overcome Visa, Bitcoin has to first position itself there! So even I don't see how bitcoin or LN can even stay at the same position as Visa.

It is like a newbie challenging an industry leader. Don't see it happening in our lifetime!

If the Lightning Network becomes:
1.As user-friendly as VISA.
2.Capable of handling as much transactions as VISA
Then yes,there's a small possibility for LN to challenge the domination of VISA.
There's another huge requirement-Bitcoin must become as mainstream as fiat money(which is less likely to happen).

What's the point of Paypal,VISA and Mastercard running LN nodes?Will they get any major benefit from this?

Of course it will. Not just VISA but also other payment systems, all of them. If the Lightning Network is to be operating, it is a lot better than VISA. Imagine having instant, very cheap, pretty anonymous, decentralized, etc payment with Bitcoin. People will prefer it over VISA and other electronic payment systems. But I think VISA is not to be defeated easily. VISA knows that Bitcoin is the future. Before it is defeated, it has already turned itself a Bitcoin ally.

Even now, if I accept high transaction fees on bitcoin network, I can get fast transaction. I don't have to wait for 2 business days and wait till Tuesday to get a completion for my transaction if I broadcast it in Friday.

With Lightning network and its future, I don't see why Bitcoin can not beat VISA but VISA will still exist and plays its roles as one of most popular payment gateways for people.

With irreversible bitcoin transactions, I won't have to worry about chargebacks. VISA's chargebacks. (https://www.visa.co.uk/how-you-pay-matters/chargeback-purchase-disputes.html)

Yeah! the problem about it is the service that offers lightning network is not yet fully known to most of the holders out there especially those new to the industry. We still have so much issue regarding its usage only some advance users who can use the service well. If it's fully developed and everything is going smooth as they planned, then that would be useful especially when the price reached its highest peak these coming years.

Blindly saying that it will replace almost any conventional payment system is not a good thing for this discussion. I don't know much about Lightning Network or VISA or how they process their transaction but what I can say is that if LN wants to topple VISA out of its throne, they have to match the infrastructure that VISA already has and provide a concrete evidence that they are faster than anything else. Maybe you are right that LN will replace other payment system, I sure do hope so, cutting the in-between for transactions is a good thing after all.

Bitcoin blockchain tps equals to 3-7.
Visa which processes around 4000 tps and can handle spikes up to 65 000 tps quite easily.
Lightning Network is claimed to potentially scale to millions of tps, while it has to achieve about 45000 tps to become a Visa competitor.

I think it is a big....NO from me.

People find it difficult to manage the most basic Crypto currency concepts like wallets now, so just imagine what learning curve it will require from them to setup a Lightning Network configuration.  ::)

The developers have a lot of work to make a system like this so user-friendly that a uneducated person from a 3rd world country, would be able to use this. ( I work on contract in Africa for some of my work and I can tell you that the majority of them, will not be able to use the Lightning Network as it is now)  ::)

Good discussion but the question is why would VISA and MasterCard companies will switch their existing high class protocols? Also anyone have thought that how much coding and efforts it will need to take while switching the current programming to the newer codes?
The cost that would take up and upgrading of all the payment processing system around the globe. I mean current speed of transaction is huge for VISA, so why this thought in the place first?

No one is talking about this?

No one is blindly saying something will replace another. What did I say? I did not say LN will replace VISA, did I?

You saying that I am right that LN will replace other payment system is wrong because nowhere did I say that LN will replace other payment system.

OP's question is that, will the Lightning Network challenge VISA someday? My answer is yes. And it will challenge not just VISA but other payment systems also. To challenge the current payment systems is not to replace them.

sometimes this is the doubt of many parties. The experiment using LN seems to be ensured by its stable use, because if this goes well I think LN can replace VISA in the crypto transaction system.

User-friendliness is a must for the LN to challenge VISA. Without it, I don't see mainstream adoption for Bitcoin's off-chain scalability solution going anywhere. So far, developers have failed with the task as the LN is somewhat complicated to use for the non tech-savvy person. Altcoins are far more easier to use than the LN, providing the same benefits of fast and cheap transactions for all (depending on the coin, of course). We're going to have to wait and see what happens in the future as developers continue to work hard on the project.

In the case of LN nodes, I think major companies will join the game once they see the true benefits of instant transactions and ultra-low fees. One of the benefits of running a routing node on the LN, is that you'll earn some small Bitcoin with each transaction performed on the off-chain solution. Of course, don't expect to earn a lot of money doing this. But it's better something than nothing. If companies like PayPal, VISA, and Mastercard run LN nodes, then adoption for micropayments on Bitcoin will soar like crazy. Right now the LN is in its infancy, so it'll take a long time before it'll be able to rival traditional payment processors anytime soon. Who knows what the future holds for Bitcoin's off-chain scaling solution? Just my opinion :)

Honestly, I don't follow this project closely, but I'm aware that many researchers have warned about a privacy vulnerability in the Lightning Network that could reveal financial information about Bitcoin transactions that were thought to be anonymous. Currently, Lightning Labs, Blockstream and ACINQ are the three main teams working on the development of the Lightning network.

And this is not the first time a vulnerability has been discovered in the Lightning network. Some time ago, the technical director of Lightning Labs, Olaoluwa Osuntokun, confirmed cases of common vulnerabilities and weaknesses (CVE), "exploited in [real situations]".

But otherwise you are right and apart from this bad news, this project is very good and there seems to be a great future.

As the Lightning Network means also 'Bitcoin', it really depends on the development of Bitcoin for Lightning Network to be able to challenge VISA in the future. I know that it seems like very hard for now but it is not impossible. Because Bitcoin has come a very long way so far and its value is so much bigger than its first years in the market. It proves that we could see Bitcoin and the Lightning Network at a much higher and better place in time.

I am not familiar with the Lightning Network. So I decided to do a search and came across the LN and Blockstream alliance.

This integration is intended for developers to make use of LN easier and more intuitive. The project is called Lightning Charge, which consists of the implementation through an API to accept Lightning payments, it is a fast integration and easy to configure.
The developers have found that LN can make faster transactions compared to VISA.

So what bitcoin is missing for the long-awaited massive adoption is development because there are already networks willing to make microtransactions faster and cheaper.

https://blockstream.com/lightning/ (https://blockstream.com/lightning/)

Let's concentrate on the basic things right now rather than making tall claims which will make us a laughing stock. Lightning acceptability is very low, even within the crypto sector. And here we are talking about challenging an established payment processor such as Visa. IMO, less than 10% of the Bitcoin users have ever used Lightning, as it is not very easy to use. We need to popularize Lightning among the Bitcoin users first, before talking about overtaking Visa.

That's certainly true, mate. The Lightning Network does come with a set of limitations,  which makes it a "terrible" challenger of existing payment processors. I hope this will change as the Lightning Network develops over time. It's all a matter of making off-chain solution easy enough for anyone to understand. Once developers do that, then LN's adoption will go all the way to the moon.

As far as I know, the Lightning Network has the capacity to overcome VISA in terms of TPS. Imagine how "threatening" the LN will be to VISA once people use it massively in the mainstream world. It would render current payment processors obsolete. The main reason why VISA, Mastercard, PayPal, and other payment processors exist is because they rely on Fiat currencies. Everyone knows that Fiat has greater adoption than Bitcoin in the mainstream world. Most people prefer stability and ease of use, so they'd choose Fiat over Bitcoin anytime. Because of these and many other reasons, we may be "lightyears" away from LN becoming a serious contender of VISA. Whenever the LN will become a success or a failure in the long run, will greatly depend on the community itself. Who knows what will happen with the LN as scalable blockchain networks (like BCH, BSV, and others) gain traction in the mainstream world? Just my thoughts ;D

If you look at the current situation, in my opinion it is impossible for the Lightning Network to challenge VISA, the popularity of VISA cannot be doubted.
Almost all countries accept payments using VISA, so from the legality of the law it is very safe to use VISA and also VISA is very easy to use. In contrast
to the Lightning Network which is quite complicated to use and even all Bitcoin users rarely use the Lightning Network. So if the Lightning Network wants
to challenge VISA it has to go mainstream first, and it may take a very long time for the Lightning Network to become popular.

LN cannot compete with VISA, since VISA is centralized. Simple.
But it's not LN that's the main competitor at horizon for VISA/MC. It's the government issued stable coins. Those are to be coming soon and don't need this centralized service, since they'll have their own.
That's why VISA is trying hard to do something, anything, towards crypto. They need to innovate and adapt, else they'll be history soon and LN will "win" just by still existing.

Nope.

What is much more plausible is VISA to adopt crypto/stablecoins (which they are testing right now) and then to use your crypto on every VISA logo store/shop.

VISA is very pro-crypto and friendly.

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https://cointelegraph.com/news/visa-will-facilitate-usdc-payments-thanks-to-fresh-partnership