May 17, 2024 - Economy

💡 What's this: Email, but make it Bitcoin

A screenshot of a tweet with an embedded video demonstrating a crypto transaction.

See a demonstration of sending money like email in this video. Screenshot: @lightspark (social media)

Open standards are great for mass adoption.

  • You are reading this thanks to a variety of open standards, such as email and HTML.

The latest: Xapo, the digital asset manager, and Ripio, an Argentine crypto fintech, just announced their deployment of Lightspark's open standard for sending bitcoins: the universal money address, or UMA.

How it works: Users of any bank or fintech that integrates UMA will get an address something like an email.

  • So, if I had an account at Xapo (I don't), I might have a UMA address as [email protected]. If Crystal had an account at Ripio (she doesn't) she might be [email protected].
  • If I wanted to send her a little BTC, all I'd need to know is that address. (Click the link under the image for a video demo.)

Under the hood, it's all over the Lightning network, including data embedded in the transaction that helps the two companies meet their compliance obligations.

  • Using Lightning means these transactions will be super fast and nearly free.

The big picture: Imagine if the various fintechs with a sideline in bitcoin started integrating UMA. Bitcoin would be even easier than Venmo because it wouldn't be limited to users of the same app.

  • Friends could easily do things like making bets in satoshis, paying each other for favors or sharing travel expenses, and it wouldn't matter if they were using different banks or neobanks.
  • Digital nomads could easily have a cheap bitcoin economy among each other, without worrying about local currencies.

Zoom out: Venmo makes it easy to send money to other Venmo users, and Cash App does the same thing.

  • But a Venmo user can't send to a Cash App user. That's the nature of closed things.
  • Lightspark's UMA is open. Any company supporting bitcoin could integrate it, just as anyone running an internet server can host email addresses.

Fun fact: Lightspark's CEO, David Marcus, used to run PayPal.

Yes, but: Don't hold your breath, that kind of thing would almost certainly run afoul of money transmitter rules in the U.S.

  • Either way, Axios has hit up a bunch of fintechs with bitcoin to ask them to let us know if they implement UMA.

💭 Brady's thought bubble: This is cool.


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