Last week, overnight, Twitter became the biggest threat to existing fintech and payments companies. Twitter announced it will allow users to tip their favorite creators using Bitcoin. The company introduced this as a test feature in May and last week rolled it out globally to all iOS and Android users.
The TL;DR: using Twitter, you can now send money to anyone in the world. The money is transmitted digitally in seconds, comes with no counterparty credit risk, and is virtually free. Twitter is not taking a cut of the transactions. Instant, nearly free, global cash finality via Twitter. Twitter became the best remittance platform in the world, overnight.
How is this possible?
The Tips feature leverages the Lightning Network. The Lightning Network is a second-layer technology built on top of the Bitcoin protocol, designed to enable cheap and fast payments. It does not have its own currency or blockchain — it is simply a network for exchanging Bitcoin transactions via payment channels established between individuals.
To understand why this matters, consider how the current payment system works. When you use your Visa card at a merchant, the actual dollars do not go directly to the merchant. The payment processing network takes on the credit risk and escrows the value while remitting the money to the merchant. Merchants pay 2-3% for this service — a fee that covers credit risk, counterparty risk, balance sheet float, and the several intermediaries required to achieve settlement.
The Lightning Network completely disrupts this by leveraging Bitcoin as its payment rails. Think of a Lightning payment channel like one wire of an abacus — the beads represent Bitcoin inside the channel. The beads can move bidirectionally, ownership is always clearly settled, and the fixed supply per channel ensures discipline. In reality, the Lightning Network is a hyper-abacus where several channels may connect any two individuals, and all participants are connected via chains of channels. Instant settlement. Near-zero cost. No intermediary.