It’s July 3rd— finally, it’s Friday! We’ve got one huge story for you today.
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Visa Partners with Bitcoin Startup Zap
Bitcoin startup Zap Inc. has joined Visa’s Fast Track program and announced a Visa debit card as part of its consumer offering. Zap is building Strike— a product that enables users to send money to anybody in the world instantly with zero fees. All Strike requires is a phone number and debit card or bank account. Strike users will be able to spend money via a Visa debit card and earn rewards, presumably in Bitcoin.
Zap’s founder Jack Mallers is a well-known Bitcoiner and Lightning developer. Zap’s products are all built on the Lightning Network, a layer built on top of the Bitcoin blockchain that enables a direct payment channel to be created between any two parties. Lightning allows for instantaneous transactions with virtually non-existent fees.
Why it matters:
Zap is the third Bitcoin company Visa has partnered with in 2020. In February, Visa granted Coinbase the power to issue Visa debit cards to its users. No word yet on what Coinbase has in store. In April, Visa partnered with Bitcoin startup Fold App through the Fast Track program as well, and Fold is set to launch a Visa debit card with Bitcoin back rewards. Visa, a world leader in payments, is making moves in cutting edge fintech, as highlighted by its multi-billion dollar acquisition of banking startup Plaid. More on this to come.
The beauty of Strike is that end-users can experience instantaneous payments through Lightning without ever setting up a Bitcoin wallet or owning Bitcoin. This unlocks an entirely new chapter for the Bitcoin blockchain and progresses us further towards a cashless society. In Mallers’ own words:
Do [users] know what Bitcoin is? I have no idea. Did they know they were using Bitcoin under the hood as a payment rail to transfer and settle value? Absolutely not. Bitcoin was behind the scenes, making a difference and benefiting individual lives and businesses without anyone noticing they were even using it.
Zap is also working on a merchant offering. Mallers’ Bitcoin journey started because his family owns a Colorado-based cannabis company underserved by the commercial banking system, and takes Bitcoin as payment. Zap’s merchant offering could help businesses take advantage of the Lightning Network for payments without worrying about Bitcoin volatility or tax liabilities.
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One more quick thing:
Payments Efficiency: Bitcoin payments giant BitPay has finally adopted SegWit, after years of pushback. SegWit (Segregated Witness) is a change in the way the Bitcoin blockchain processes transactions and was deployed in 2017.
In a nutshell, SegWit decreases the cost of sending transactions on the Bitcoin blockchain and reduces fees for everybody on the network. When SegWit was proposed, another protocol change called SegWit2X was proposed as an alternative. BitPay was on the side that chose SegWit2X, but it failed, and SegWit was adopted by the network.
BitPay processes over $1 Billion in payments annually, >90% of which are in Bitcoin. BitPay adopting SegWit will increase the volume of transactions going through SegWit and will reduce transaction fees for the network’s participants.
That’s all for today! We’ll be back again with another Ryze Recap.