Bitcoin Ecological Innovation: The Integration of Lighting Network and Nostr

In the first half of 2023, innovations in the Bitcoin ecosystem have become one of the hot topics in the industry. More and more people are starting to pay attention to the development of the Bitcoin ecosystem, including emerging technologies such as BRC20, Ordinals NFT, and Bitcoin Layer2.

In the development history of Bitcoin, the community has repeatedly had disagreements about the future path. However, amidst these controversies, a potential huge opportunity gradually emerged: the decentralized social payment model combining the Lighting Network and Nostr.

The Birth of the Lighting Network: The Scalability Debate

The design of the Bitcoin network limits its transaction processing capacity, making it unable to meet the demands of large-scale applications. Therefore, since 2015, the Bitcoin community has begun discussing scalability solutions.

In the choice of scaling technology paths, the community has split into two major camps:

1. Radicals: Support increasing block size to enhance Layer 1 transaction capacity.
2. Conservatives: Advocating for the combination of Layer 1 technology upgrades and Layer 2 scaling solutions.

Ultimately, the Bitcoin network adopted a conservative solution. In August 2017, Bitcoin completed the Segregated Witness upgrade, achieving a certain degree of Layer 1 scalability. In March 2018, the Lighting Network went live, enabling fast payment functions through off-chain transactions.

After a complete cycle, the Lighting Network has developed into a network with 18,000 nodes and over 70,000 channels, locking up more than 5,400 Bitcoins. At the same time, several Bitcoin Layer2 solutions such as Stacks Network, Rootstock, and Liquid Network have emerged.

However, the payment functionality of the Lighting Network is more suitable for being embedded in other applications, especially social applications, rather than existing as an independent decentralized application.

The Combination of Nostr and the Lightning Network: A New Paradigm of Social Payments

Nostr is a simple, censorship-resistant global social protocol. It does not rely on centralized servers, allowing users to freely create public and private key pairs to enable the free publication and transmission of information.

From a user experience perspective, the Nostr-based social network Damus is very similar to Twitter. Users can post, like, follow others, and retweet, among other actions.

The working principle of Nostr is as follows:

1. Users run the Client (which can be a native client or a web client)
2. The user edits the content and signs it with the private key.
3. The signed content is sent to multiple Relays
4. Relay is responsible for broadcasting the content to other users

It is worth noting that the most popular Nostr client, Damus, has built-in Bitcoin Lighting Network payment functionality. Users only need to enter the Nostr public key to directly call the Lighting Network to pay Relay fees.

Currently, the Nostr ecosystem has more than 23 million public keys, with over 3.6 million accounts having personal profiles, and more than 170,000 accounts possessing Lighting Network addresses. The entire network has 1,644 Relays and has experienced over 100 million events.

Despite the criticism of insufficient Relay incentives faced by Nostr, possible solutions include using AI Bots as Relays and charging a one-time fee via the Lighting Network to cover operational costs.

The combination of Nostr and the Lighting Network provides a model for the native integration of social applications with Bitcoin. In the future, there may be more social applications combined with Bitcoin (Lighting Network), and perhaps the large-scale adoption of decentralized social networks will first explode in this field.

Conclusion

Bitcoin, as a decentralized payment system, has financial inclusivity with no entry barriers. After achieving fast payments through the Lighting Network, it shows unique advantages in the applications of decentralized social payments and even in the AI field. This innovative integration may bring new development opportunities to the Bitcoin ecosystem.