A few days ago, Zap founder Jack Mallers announced Strike, an important project that has been under development. Strike's originality is that it allows the use of Bitcoin and the Lightning Network to settle daily transactions without the payer having to know they are using Bitcoin. Before discussing why Strike can be a key turning point in the development of Bitcoin, let's briefly outline how Strike works and the advantages of using it.
How does Strike work?
Let's start with a simple scenario: you are a customer of a company that uses Strike / Zap for transaction settlement. This company offers you discounts on using Strike, then you download the Strike App and deposit a little money from your bank account. When you shop at this company and are ready to check out, you will see a QR code, and your payment will be completed after scanning. For end users, this is a very simple and straightforward payment experience.
Behind this, the QR code is actually a Lightning Network receipt, and your money in the Strike App is used to buy enough BTC (through a liquidity provider) to pay for this Lightning Network receipt. Strike immediately sent BTC to the company's Lightning Network channel. As a user, you are not exposed to any details of the process, all you see is that the money was immediately paid to the company.
So, the question comes, why? Why pay this way?
Why Strike / Bitcoin Can Become the Right
Payment Method Companies that like this payment method usually can't get or afford banking. This may be due to the nature of the company, the credit history of the company owner, or due to the extremely high fees to complete the settlement. The cannabis pharmacy in Colorado has a handling fee of 5-15% per transaction. As long as users can complete the payment without too many obstacles, these companies will greatly benefit from Lightning Network and BTC as the settlement layer.
Of course, Strike still charges fees, but it's not as high as 15%. This optional payment method provides a faster, more secure and more economical way to settle daily transactions.
Strike could be a key product of Bitcoin
The tax law that classifies Bitcoin as property is one of the main reasons Bitcoin is struggling with payments. Another reason is volatility. As believers in Bitcoin, we want to see Bitcoin as a store of value and, if possible, electronic cash. Strike cleverly solves these problems. Strike users can use Bitcoin as electronic cash for payments without being affected by fluctuations or taxes. In this case, Bitcoin and Lightning Network have become an effective payment method that can directly compete with current methods without any "frequently encountered" Bitcoin transaction disadvantages, such as time-consuming settlement and on-chain Fees or volatility. This brings Bitcoin closer to its goal of becoming a globally recognized currency and settlement layer.
Strike is committed to helping users pay for Lightning Network receipts using a debit card or bank account. With Strike, users no longer need to consider fluctuations, taxes or set up a wallet to transfer in or out of Bitcoin. In fact, they don't even need to own Bitcoin to scan Lightning Network QR codes to complete transactions. Strike is expected to drive greater adoption of Bitcoin.