Lightning Labs launches AI tools for Bitcoin transactions and holdings.

Bitcoin Lightning Network development firm Lightning Labs has unveiled a new set of tools that allow artificial intelligence (AI) to send and receive Bitcoin (BTC) on the network’s layer-2 solution.

On July 6, Lightning Labs announced the toolkit which enables AI applications like OpenAI’s ChatGPT to interact with the Bitcoin network, allowing them to send, receive, and hold the cryptocurrency.

This development aims to make payments faster, cheaper, and easier for AI developers. It allows them to move away from traditional and often restrictive payment methods while also enabling pay-per-use AI models on the Lightning Network.

Large language models (LLMs) are software applications that generate human-like responses to user prompts and perform various tasks. Lightning Labs expressed excitement about the latest wave of LLM models and the innovation they bring.

Announcing a new set of tools to build Lightning⚡and #bitcoin-powered AI products for a global audience. Using L402, a standard for API authentication with LN payments, and @langchainAI, a simplified AI app framework, we are opening up #AI4All! [Link to Tweet]

Lightning Labs explained that the tools are built on the “L402 protocol,” a native authentication mechanism for the Lightning Network. It also utilizes “Langchain,” a library that simplifies operations with AI applications.

“With the tools we’re releasing today, developers will be able to build more accessible AI infrastructure for both humans and agents alike.”

The Lightning Labs team also recognized the issue with current LLMs, which lack native web-based payment mechanisms. AI application developers are currently reliant on outdated payment methods like credit cards, resulting in additional expenses for users.

“A new fast-growing class of intelligent LLMs or AI Agents cannot easily access fiat payment systems as they are not registered entities with any nation,” Lightning Labs noted.

Related: The state of the Bitcoin Lightning Network in 2023

Kody Low, a developer at the community payments platform Fedi, discussed the interoperability between AI and BTC for payments during the Stack Sats podcast on July 6:

“AI is one of those things where there is absolutely no better solution anywhere in the world than Bitcoin, and AI companies have not yet solved their monetization problems.”

According to data from the Lightning Network analytics platform 1ML, the current capacity of the network is 5,432 BTC, equivalent to roughly $163.5 million. Bitcoin Visuals has reported a decrease in the number of lightning channels over the past year, from around 80,000 in July 2022 to approximately 70,000 at present.

Magazine: ‘Moral responsibility’ — Can blockchain really improve trust in AI?