David Marcus is building on the Lightning Network and focusing solely on Bitcoin, following his time at PayPal and Facebook’s Meta.
David Marcus has been working on perfecting online payments for almost 25 years, since they first became possible. In the mid-90s he founded a telecom company that offered internet access and telephone service, and later launched Echovox, which became Zong in 2008. Zong was a mobile platform that allowed users to pay for things online directly through their mobile phone bills. When PayPal acquired Zong in 2011, Marcus joined the company and became its president the following year.
Although he read the Bitcoin white paper shortly after it was published, he didn’t fully embrace it at first. However, in 2012, when Argentina ordered PayPal to stop all transactions that involved sending money out of the country, Marcus became interested in Bitcoin as he saw it as a way for consumers to move their money in a way that aligned with his views of self-sovereignty and money. He attended the Bitcoin 2013 conference in San Jose and was fascinated by the idea of moving value in a self-sovereign way without intermediaries.
Despite his interest in Bitcoin, Marcus was not yet ready to give up on the possibility of institutionalized yet open payments for the internet. In 2014, he joined Meta (then Facebook) as its vice president of messaging products, developing the Facebook Messenger mobile app. In 2015, Marcus released Messenger P2P Payments, which allowed users to send each other money from their synced checking accounts via the app.
By mid-2019, Marcus had begun leading Facebook’s cryptocurrency project, Libra, which was later renamed Diem before being abandoned altogether. Marcus considered using the Lightning Network for his project, but ultimately decided it wasn’t robust enough to fulfill Meta’s vision due to its limitations in nodes and liquidity. Marcus defended the project before the House Financial Services Committee and the U.S. Senate’s banking committee, as well as answering questions about Meta’s history of invading user privacy.
- Argentina plans to support Bitcoin through a gathering and event in Buenos Aires.
- Strike brings custody in-house, drops third-party services.
- Crypto.com suspends US institutional exchange service.
Despite the challenges, Marcus believes that it is necessary to build proprietary technology that can be decentralized to the best of their abilities in order to achieve their vision.
Ultimately, Marcus was unable to decentralize a payments project under Meta and has realized that attempting to do so on any network other than Bitcoin is a futile exercise. He stated that “We’ve built the unshakeable conviction at this point that the only blockchain and the only underlying assets that can support a truly open protocol for payments on the internet is Bitcoin and nothing else.” In 2021, Marcus left Meta and the following year he founded Lightspark to pursue his conviction.
The Reason Bitcoin And Lightning Are Better
Lightspark develops software and tools to make it easier to access the Lightning Network, such as its software development kit that helps businesses offer Lightning wallets to their customers and Lightspark Predict, which identifies the best-performing Lightning nodes and can route transactions to them.
Instead of building a centralized platform for digital payments, Lightspark is focused on building tools to help customers access this existing, decentralized platform. Although the adoption of the Lightning Network is still far from rivaling the user base of platforms like PayPal, Marcus is optimistic about its potential to scale if companies like his are successful.
He said, “Lightning still has issues, but I feel very confident that we’re in a position to address these issues. You’ll see that for companies to integrate on Lightning using Lightspark services, you don’t even need to worry about channels. You don’t need to worry about liquidity. You don’t need to worry about channel rebalancing and distributing liquidity. You don’t need to worry about what routes you’re going to use and which minimum fee or maximum fee you’re going to set. All of that complexity is being completely taken away from the equation of a company deciding whether they’re going to implement Lightning for their consumers or not.”
When asked if abstracting users too far away from managing their own liquidity, channel balances, and routing could recreate the issues with centralized financial middlemen, Marcus responded with an analogy.
He explained, “In the early days of the web, if you wanted a website and you wanted to be on the internet, you had to go build your own server, find a rack, put it in a rack, buy a router, configure your router, get an E1 or a T1 line, plug that router into your E1 or T1 line and then maintain that whole thing all the time, and it was like, OK, no one does that. But the reason Lightning and Bitcoin are better is because there are companies like Lightspark that will make things easier for mass market adoption, but if you are in a random country anywhere, and you just have internet connectivity, you can run a node on your phone yourself and be a participant in this network. And I think that’s what makes it amazing.”
Furthermore, he emphasized that his intention now is to enable a certain kind of Lightning adoption, rather than roll out a solution that minimizes the need for independent participants. He said, “We don’t expect everyone to use our software. That would actually be a bad thing, right? We think that everyone should run their own thing and we’re going to cater to a certain segment of the market that is going to tend to be larger, enterprise-types of customers.”
Of all the executives actively working on Bitcoin projects, Marcus probably has the most legacy experience to inform him on what Bitcoin needs to succeed, as well as what it must avoid in order not to fail. And, declaring that building on Lightning is the culmination of his life’s work, he’s determined to succeed.