Strike Could Be Venmo for Bitcoin Advocates
One of the things that I left out of my crypto crash course article from a couple weeks ago was Bitcoin's Lightning Network. Why? It's confusing AF and not necessarily a great way to persuade adoption from people who aren't as crypto or tech-savvy. But the point of the Lightning Network is lower transaction fees and to allow for micropayments. The Strike app looks like it could be Venmo for Bitcoin advocates who want to support content creators. I'll get into why in a moment. First, the issue with Bitcoin transactions for the last few years is that the average price for a peer-to-peer transaction without a custodian has been very cost prohibitive. Currently, it would cost $2.30 to send Bitcoin on-chain in a true peer-to-peer capacity regardless of how much is being transacted. $1,000,000? That costs $2.30. $10? Also $2.30.
Peer-to-peer exchange with Bitcoin is literally the entire point of its existence. The white paper written by Satoshi Nakamoto back in 2009 has the phrase "peer-to-peer" in the title. What is peer-to-peer in finance? It's basically the ability to transact value with another consenting party. Good peer-to-peer solutions enable sharing with each other with as little friction as possible. The best way that I like to explain things is through an analog. If my buddy and I go out to the pub and get lunch together and we decide to split the bill but only one check comes, rather than making the server go back and rerun the checks, my buddy can just give me cash to pay for his part of the lunch and I can swipe my card to cover the full bill. Him giving me the cash is physical peer-to-peer exchange.
PayPal and Venmo have proven that this can be done electronically without paper cash. "There's an app for that." Remember that saying? With Venmo, rather than paying with paper cash, my buddy at the pub can send me his portion of the check instantaneously through the app. Now, this only works if we both have Venmo. What Venmo does is it has an internal ledger that keeps track of all of the customer assets that it has under custody. When someone sends ten bucks to a friend from one Venmo account to another, Venmo is able to process this nearly instantaneously because nothing is physically moving and nothing is moving out of Venmo's corporate balance. The ten dollars are just moving from one Venmo ledger line to another. Those ledger lines represent the two accounts that are involved in the ten dollar transaction. Since the Venmo transactions don't change from one bank to another, there is no traditional payment rail friction. This keeps transfer costs between accounts on the Venmo platform virtually non-existent.
The point of sharing this is to provide a fundamental understanding of what some are trying to do with Bitcoin's Lightning Network. I'm not going to try to explain how the network functions because it's a bit difficult to comprehend. But if you're curious, this video is good.
Why Strike?
All of this brings us to Strike. Strike is a Bitcoin payment app that seems to be for Bitcoin's Lightning Network what Venmo has been for US dollars. By utilizing the Bitcoin Lightning Network to make payments off-chain, Strike can keep Bitcoin payments as cheap as possible. Of course, like Venmo, both parties who wish to transact with each other need to have Strike accounts to pull it off. And frankly, if you're trying to send Bitcoin to a friend, you don't need a custodian at all if you're willing to swallow the $2.30 network fee. But that fee probably eliminates the ability for my buddy and I to exchange Bitcoin in our lunch at the pub in the scenario I described above. Furthermore, people who have Coinbase accounts can already do this. If you have my Coinbase Bitcoin wallet address, and you have a Coinbase account as well, you can already send me Bitcoin without fees. For the exact same reason that Venmo users can exchange value with no fees.
So what is so special about Strike? Strike has integration with something called PlebPay. And this is not me trying to hype, I really mean this; PlebPay looks like it could be game-changing for content creators and their fans. Because PlebPay enables Bitcoin micropayment paywalls. You have to have Strike to use it, but PlebPay allows me to put a paywall on any link. So I thought I'd try it out. Remember the You Have the Power series? For Christmas, I added a chapter to the series and extended two of the four previously published chapters to create a mini eBook. I gave that eBook away to my paid members. That means a lot of you didn't get to see it. And though some of you may have wanted to, paying $10 just to get a 45 page eBook that you've likely seen 60% of already may not have been a compelling enough value proposition.
What about $1? Would you buy the eBook then? If so, you can! Through the PlebPay exension, you can send $1 over the Lightning Network and get access to a downloadable PDF of that eBook. This is big for content creators because it means I don't need something like Woo Commerce to setup up an online store with traditional payment rails. Now, I'm going to fully admit that I'm new to Strike. I'm sort of figuring this all out with you. But the future of Web 3 and online micropayments are very interesting to me as a content creator. Micropayments figure to be completely disruptive to paywalls, in my estimation. In the future internet, content creators will still probably be able to offer subscription packages that give their fans and followers access to content in bulk. But the adoption of micropayments will allow content creators to offer a la carte payment options as well.
For instance, what if you like my crypto content but not my stock ideas? You could pay for what you want if I priced things individually. It's a very interesting concept and I think those of you who are content creators yourselves should consider taking a look at Strike and PlebPay. You can actually use my Stike referral link and get yourself $10 for signing up and trying it out. Strike has an iOS app, an android app, and a browser extension. So there are options depending on what device you use.
I've obviously spent quite a bit of time lately focusing on censorship, privacy, owning your own platforms, and generally just opting out of a system that has a lot of problems and leadership that doesn't seem to have any urgency to solve them. So, it's up to us to do it ourselves. It's up to us to build something better. And to me, it starts with the freedom to exchange ideas and value. Crypto still has a long way to go. But Strike and PlebPay seem like a step in the right direction.
Disclosure: I’m not an investment advisor. I merely share what I do and why I do it. You shouldn’t take anything I say as investment advice and always do your own research when making investment decisions. Cryptocurrencies, tokens, STONKs, and digital trinkets could all go to zero. I have no job and I live in my wife’s basement. I’m the last person on the face of the earth who you should listen to for financial advice or life advice. I’m not featured on trustworthy financial news sources like CNBC or Bloomberg and I don’t wear a necktie when I make my trades. I am not being compensated by Strike or PlebPay for this post.
