Why It Is Important To Construct Stablecoins On Top Of Bitcoin

Due to growing interest in emerging countries, Lightning Labs is implementing the new Taro protocol to enable the usage of stablecoins on the Lightning Network.

Part of P and Q’s “Bitcoin Magazine Podcast,” which was transcribed here. Ryan Gentry, head of business development at Lightning Labs, joins them to discuss the company’s recent work on the Taro protocol, which will allow stablecoins to be used on the Lightning Network.

Question: I’d want to have a chat with you regarding stablecoins and whether or not they are essential to the Bitcoin ecosystem.

Said Ryan Gentry: It’s a terrific inquiry, and it was a major factor in our choice to zero down on Taro this season.

Let’s rewind to Bitcoin in 2021, when Jack Maller gave his fantastic presentation after hearing about the El Salvador bitcoin legal tender bill. Since then, Lightning, Lightning applications, and Lightning wallets have been widely used in emerging economies like as Brazil, Argentina, El Salvador, Nigeria, Ghana, South Africa, Vietnam, and almost everywhere else.

One of the best parts of my job is collaborating with Bitcoin entrepreneurs and engineers from across the world who are all working toward the same goal of widespread Lightning adoption. We had been in constant communication with them during the previous year, and we were thrilled to hear that they were seeing an unprecedented influx of new signups and adoption.

We heard the same story over and over again from businesses in developing countries as 2013 wound down: “OK, this has been the best year ever, massive adoption, numbers all up and to the right, and I have now successfully bought all the Bitcoiners, like in Chiang Mai, Vietnam.” Neutron Pay: “We got all the Bitcoiners. All of them have been purchased by us at this point. They’ve all downloaded our app. It’s incredible. That’s fantastic. Our target audience for new signups is primarily motivated by monetary gain.

That was a common theme we heard from people in South America, Africa, and Southeast Asia, all of whom we’d like to bring into the Bitcoin ecosystem but for whom making ordinary purchases with bitcoin was too difficult, so they’d rather use dollars.

If you work at Lightning Labs, it goes without saying that you support Bitcoin’s maximum possible growth. Everyone on the team, I believe, has a really positive outlook on bitcoin. If we weren’t confident in bitcoin as an asset, we wouldn’t be developing a payment protocol on top of it. However, it became clear from conversations with actual individuals in the globe who are working to address genuine issues and increase app usage, that they desperately want financial assistance.

If we can help all the startups that are pushing Bitcoin infrastructure and bringing users in and trying to educate users about why bitcoin is important by providing them with this tool that allows them to reach the next 50,000 users, 100,000 users, million users, then I think that’s a huge win for the Bitcoin community. That’s fantastic news for the ecosystem as a whole since it’s responding to what users have been asking for all along: their needs.

We are getting the benefit as these new companies adopt Bitcoin infrastructure and spread Bitcoin nodes and spread Lightning nodes and Lightning channels into all these places that maybe they wouldn’t necessitate it otherwise because Taro is running on Bitcoin rails, because it requires a full Bitcoin node, because it requires a Lightning node as well, and if we give the market what it wants in stablecoins.

The mere proliferation of Bitcoin infrastructure is, in my opinion, undervalued. If our understanding of bitcoin as an asset is correct, then the demand for dollars will inevitably fall, and the Bitcoin infrastructure will be in place to facilitate a shift in that demand. We’re all looking forward to that day, and we’re all working toward it, but there’s a little hiccup in the middle where we have to listen to what the people want.