Meta Adopts Bitcoin After Its Own Stablecoin Failed

Meta has adopted Bitcoin and its Lightning Network after years of seeking to develop its own stablecoins. The tech giant has also launched a new company, LightSpark, backed by the likes of Andreessen Horowitz (a16z), Paradigm, Coatue, and Matrix Partners.

LightSpark will build backend infrastructure for businesses that want to use Bitcoin’s Lightning Network, which allows for low-fee payment channels for simple transactions like buying coffee. Lightning was built to offload some of the data processing load from the Bitcoin blockchain, which has a finite amount of storage space.

Despite some early controversy and growing pains, Lightning quickly gained acceptance as a way to send modest payments without paying exorbitant fees.

Blockstream, Bitcoin’s largest infrastructure business, is one of Lightspark’s main competitors. It runs Core Lightning, the largest Lightning implementation. Strike, another competitor, already has a Lightning payments app in 200 countries. Voltage, a provider of cloud Lightning nodes, is also a competitor, making it easier for Lightning users to set up a hosted node.

David Marcus, a PayPal mafia member who founded LightSpark, formerly led Meta’s efforts to build a stablecoin.

It had planned to manufacture various coins for different parts of the world at initially, but had to abandon the idea. It instead chose to concentrate on just one: Libra.

When Meta’s Libra Association debuted in June 2019, it drew a lot of attention. MasterCard, PayPal, Stripe, Visa, eBay, Lyft, Uber, Spotify, and Andreessen Horowitz were among the group’s members. However, the initiative was quickly met with opposition from Congress. Regulators were concerned that a large firm could have so much power over a global economic project.

After pouring billions of dollars into stablecoin development (Meta has a $27 billion yearly R&D budget), the internet giant eventually gave up, selling Diem’s assets to Silvergate for a sum of $182 million.

Meta now uses Bitcoin and is intrigued by blockchain technologies. It’s also experimenting with a new feature in its sister social network, Instagram, that highlights NFTs.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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