Lightspark Developers Day highlights the latest innovations in payment using Lightning and UMA

Lightspark, a new-age cross-border payment company, held its Developer Day in Lagos on Friday. The event which was held at the Zone Tech Park, witnessed participation from a wide array of professionals ranging from developers, payment experts, crypto enthusiasts, brand influencers, celebrities and members of the media.

In his opening remark, Co-founder and CTO of Lightspark, Kevin Hurley noted that Lightspark began two and half years ago with the sole purpose of modernizing money. The company set out to achieve this by becoming an open network for payments which enables bank accounts to interact with other bank accounts around the world without the hassles of traditional banking systems. So far, they have been able to convince 200 million people around the world and convert them into users.

The company intended to achieve it through products revolving around two cutting-edge technologies; Lighting and the Universal Money Address (UMA), a technology that allows bank accounts to send emails to each other with lightning speed.

“It is really like a human-readable identifier which allows me to send money to anyone in the world with my native currency and they can receive it in their native currency. It globally connects bank accounts, in instant payments and very low fees, much lower than you will find anywhere else. So I could send to someone in Kenya and they would receive it in Kenyan shillings immediately. It breaks down the borders that exist between money bright now by creating this global operability layer where you have this instant settlement in open protocol anyone can join,” he said.

How Lightspark is implementing Lightning and UMA

Breaking down the use of Lightning in payment, VP of Product at Lightspark, Nicolas Cabrera said the open source technology is the formation which the company is leveraging for its instant settlement service. He pointed out that Lightning is a layer two on top of Bitcoin, thus it is the instant settlement layer that helps move money across borders and across countries a lot more efficiently.

“So when you have a wallet or account enabled on Lightening, it just helps converting any fiat into these layer 2 which is based on Bitcoin, being this open decentralized mutual network, any entity, regulation or countries do not control it, that allows enough liquidity against the asset for the local currency that we need to convert into. Lightening is the formational layer on our platform,” he said.

The universal money address (UMA), on the other hand, is the messaging layer. Cabrera explained that UMA is a messaging protocol that helps financial institutions to talk to each other so they can exchange the right information between the sender and the receiver which is the core of payment before money can be sent.

“If I initiate sending money from here in Nigeria to someone in the US, I cannot do it without my financial institution; my wallet or my bank, validating that I have the money I want to send and that the receiver is a real person with a real bank account that has been KYCd (know your customer) and is a legitimate user. That is what UMA is designed to do in a very simple way. So when I am initiating UMA transactions, I am allowing my wallet or my sending institution to talk to the receiving side. All of that happens instantly under UMA messaging layer,” he said.

He noted that the system works 24 hours a day, and it doesn’t close when the banks are closed. He said when these wallets and accounts talk to each other, they validate and confirm they have what they need to process the transactions then money can be sent and received instantly. So it is really that messaging layer that helps send compliant payments.

What role does Lightspark play in all of this? Well, the company helped design UMA at the time as a service offering. But along the line, the team decided they wanted more people to be able to access and use the messaging protocol so they made it open source so anyone can build on top of that. However, Lightspark still reserves the power to implement the technology and it does this through a product called LightSpark Connect.

“Anyone or any wallet or bank account that wants to enable Lightening which is a difficult technology to build on, we make that very easy for them. So that is one part of our implementation infrastructure,” Cabrera said.

The company also have the LightSpark Extend product which helps connect UMA and the benefit of UMA to Lightening and connecting that to the traditional instant payment channels in each country

Speaking about the choice of Bitcoin as the underlying currency, Cabrera said there are three reasons mainly why the team chose Bitcoin as the best currency platform. The first is that Bitcoin is a global asset that is not owned by any entity. So it is totally open and totally decentralized, and as such any financial institution won’t be worried that its international transactions would travel on wires that other people own.

The second reason is that Bitcoin is here for the future. It is going to be here for years to come. There is no way that it is going to be shut down at some point because there is so much adoption already. So, for regulatory clarity, it makes sense to use Bitcoin because the service has global reach. The last reason is that there is enough liquidity in the local currency against Bitcoin as an asset.

“Because we want to send across any currency in the world, we want to make sure that we can do that conversion. And that exchange from Bitcoin to whatever local currency and we can enable that,” he finished.

See also: Will Nigeria’s ₦50 electronic money transfer levy disrupt its cashless revolution?