If Bitcoin Doesn’t Become Everyday Money, the Mission That Inspires Us All Has Failed

At the Bitcoin Conference in Las Vegas, an industry representative criticized the scene’s obsession with holding rather than spending. The good news, however, is that Lightning is now being used so often that a routing node yields real profits.

This year’s Bitcoin Conference in Las Vegas saw more politicians in attendance than ever before. Eighteen speakers had ties to politics, typically to the Republicans, with Vice President JD Vance likely the most well-known as the keynote speaker.

Politics was so prominent that Rolling Stone mockingly headlined “Crypto Bros Celebrate Themselves at Bitcoin’s Biggest MAGA Convention,” while Forbes lamented that “Trump turned Bitcoin into a political weapon.”

As is usually the case, the speeches of politicians offer little of substantive interest, whereas the real gems can be found elsewhere. A strong example came in the presentation by Miles Suter of Square, the payments service of Block—the company founded by Twitter founder Jack Dorsey—that, with its CashApp, operates one of the most popular Bitcoin apps in the U.S.

Suter took aim at the prevailing and often euphoric love of the Bitcoin community for HODL and MOON (i.e., “hold on for dear life” and hopes for massive price appreciation). It’s great, he said, that prices are hitting new records, that market capitalization is now measured in trillions, and that more and more people and companies are saving in Bitcoin. But…

Lightning Is Slowly Catching On

…but: “Electronic P2P cash remains a dream. People are holding Bitcoin, but they seldom pay with it. If Bitcoin doesn’t become everyday money, the mission that inspires us all has failed.”

Square aims to help Bitcoin become not just an asset but also a widely used means of payment. According to Suter, the Lightning Network is essential for this. Thus, he announced, Square will bring Lightning to the point-of-sale systems of its four million merchants.

This is already big news. Wherever Square is used at checkout, Bitcoin will be accepted in the future. Overnight, the number of places to pay with Bitcoin or Lightning will multiply. This feature is set to go live in the second quarter of this year and should reach all merchants by 2026.

But even more intriguing is a detail Suter mentioned in passing: Lightning is slowly but surely reaching users. In 2024, Square’s node saw a sevenfold increase in Lightning payments. Even now, one out of four CashApp payouts is conducted over Lightning—a fantastic success.

Earning Yield on Bitcoin through Lightning

This also fulfills a long-cherished vision that was nearly written off: that running a Bitcoin node would become profitable through Lightning. Square’s node, Suter said, made a profit of nearly 10 percent over the past year. The company earned about a million dollars merely from routing other users’ payments through its node.

Lightning payments travel across the network by hopping from node to node. Each node provides the necessary liquidity in advance, while having cryptographic assurance to recover the amount after the payment is delivered. For this service, a Lightning node operator earns a portion of the fees paid by the sender. Previously, this hardly mattered, as transaction volumes were simply too low. Over the past year, this seems to have changed.

This means Lightning allows you to earn a real yield on your bitcoins without relinquishing self-custody. If this trend continues, it will create a strong incentive to operate a Lightning node and make bitcoins available as liquidity—which in turn would make the Lightning Network more reliable and liquid.

It now appears that a game-theoretical assumption is, finally, after many years, coming true.