Lightning Speed: Taro Wants To Abolish Cross-Border Payments, Disrupt The Market
August 13 2022 - 8:13AM
NEWSBTC
Have you heard about Taro? It’s an improvement proposal for the
Lightning Network that Lightning Labs introduced in April. “Taro
makes Bitcoin and Lightning multi-asset networks,” the company
claims in the latest edition of their newsletter. They also explain
in simple words what the protocol does, how it does it, and the
implications of its implementation. “In a world of omnipresent
communications connectivity, nobody says “cross-border messaging”
anymore. Taro promises to do the same thing to “cross-border
payments” by decentralizing the entire global FX market into a
protocol that can run on a Raspberry Pi by anyone, anywhere.” Is
the Lightning Labs exaggerating? Or is Taro the protocol that will
bring the next billion people to the Lightning Network? “The
opportunity provided by Taro bringing assets like stablecoins to
the Lightning Network is clearly enormous,” the company claims. Can
Lightning Labs back that case and argue it convincingly? Let’s find
out. What Taro Does And How It Does It The first thing
Lightning Labs makes clear is the psychology behind the improvement
proposal. It almost seems like bitcoin’s Lightning Network will be
serving Taro and not the other way around. “Instead of starting
from scratch and bootstrapping a new ecosystem of nodes and
liquidity, Taro will leverage the existing network effects of both
the infrastructure that’s been built out over the last several
years plus the 4000+ BTC allocated to the network today as a global
routing currency.” How does it work, though? The “edge nodes” are
the key. By “integrating with Taro,” normal Lightning nodes can now
“process an instantaneous conversion from L-USD into BTC or vice
versa, for a small fee.” That means that “every Taro transaction on
the Lightning Network will be converted into BTC by the first hop,
routed across the network as BTC, and then converted back into a
Taro asset by the last hop before the destination” What is a “Taro
asset”? Whatever you want, your BTC can be “converted into
different assets such as USD to EUR or USD to BTC.” Or, as
Bitrefil’s Sergej Kotliar puts it, “Pay in currency of sender’s
choice, receive in currency of recipient’s choice. This means that
every wallet can now have native Strike-type “USD balance”
functionality for example. With no need to trust the wallet, the
only trust lies in the issuer of the token.” The trust model is the
main difference from Galoy’s Stablesats, another novel concept that
looks for a similar result. BTC price chart for 08/13/2022 on
Bitstamp | Source: BTC/USD on TradingView.com What Does Taro Mean
For The Lightning Network? In a recent interview published by
NewsBTC, AXX’s head of research and strategy Ben Caselin explained
the protocol further “In Taro, smart contracts and asset transfers
are not executed by the blockchain, and they are also not enforced
by the blockchain. Instead, transfers are executed by the sender of
an asset (who has to make a corresponding bitcoin transaction), and
enforced by the recipient, same as the Lightning Network.” And in
the previous Lightning Speed, we theorized about how big could this
development be for the Lightning Network. “According to The Bitcoin
Layer, “a global capital market operating on top of
bitcoin-denominated financial rails is inching closer with each new
onramp.” And the Taro protocol and all of the assets it would bring
to The Lightning Network is the mother of all onramps.” Back to
Lightning Lab’s newsletter, the company toyed with even bigger
expectations. For example: “A community bank could issue a local
stablecoin on Taro and it would only need a handful of nodes or
liquidity providers to make a market between the local currency and
the BTC core of the Lightning Network to be connected to a global
community of buyers and sellers. No permissioning required!”
They’ll Never See It Coming According to Lightning Labs, bitcoin
“renders cross-border payments obsolete.” Stablecoins are a huge
business and so are cross-border payments. In the intersection
between them, Taro stands tall. “Visa’s 65% operating margin is one
of the highest of all the companies in the S&P 500 index, and
this margin is Lightning and Taro’s opportunity. They’ll never see
it coming.” The company expects that the benefit for everyone
working on the Lightining Network will be tremendous. “We expect
that bringing Taro to market and making Lightning a multi-asset
network will dramatically expand the Total Addressable Market for
those building Lightning applications.” And you know what more
users mean, more of those sweet-sweet fees.} Featured Image by
Joseph Mucira from Pixabay | Charts by TradingView
Amp (COIN:AMPUSD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Amp (COIN:AMPUSD)
Historical Stock Chart
From Sep 2023 to Sep 2024
Real-Time news about Amp (Cryptocurrency): 0 recent articles
More Amp News Articles