The electrical grid cut the time and cost of accessing reliable light to nearly zero.
Soon after, we found ways to use that instant and cheap energy source to power other aspects of our day-to-day lives. Radios, TVs, phones, appliances, computers, and even to our cars are powered by the electrical grid today. Light was the first application, but only just the beginning.
Air conditioning cut the time and cost of manipulating temperature to nearly zero.
Reliable temperature control enabled a mass migration to the southern US states, made long-distance food transport possible, improved food safety standards across America, and formed the foundation of the air circulation systems used in today's computer fans. Hollywood's golden age even coincided with the adoption of air conditioning systems in movie theaters across America.
The internet cut the time and cost of sending information to nearly zero.
It gave the world instant and free access to information, but that too was only just the beginning. The internet also enabled the long tail of low-value information exchanges that were never possible before, and at scale they now represent some of the world's largest businesses and industries.
When technology eliminates the time and cost required to perform a task, entrepreneurs find new ways to build products that weren't previously possible.
More specifically, these new innovations tend to leverage the free and instant nature of a technology to enable low-value use cases at a much higher scale than ever before. To explain further, let's use the internet as an example.
Before the internet, it was costly to send information.
TV, radio, and newspapers broadcasted only the most useful content to the masses. Every city had a few dozen professionally-produced TV channels, radio stations, and newspapers that shared content that was appealing to broad swaths of the population.
The postal system was for broadcasting only the most useful messages to a recipient. It took days, sometimes weeks to send a letter, and twice as long to receive a reply. The sender had to be thoughtful and concise, sending only the most important information.
Books were for sharing well-researched views on a particular subject. Publishers had high fixed costs to print a new book and distribute it to bookstores, and therefore had to be confident in an author and their message.
All these information exchanges were valuable information exchanges at relatively low volumes.
The internet cut the cost of sending information to zero.
The immediate effect was that anyone could send information in any format, to anyone, for free.
But that was just the tip of the iceberg. Not only did the internet lower the cost of producing existing content, it created entirely new communication formats that weren't valuable enough to be distributed before.
Before the internet, only the most valuable photos were distributed through newspapers, magazines, or the postal system. Today, people all over the world share billions of informal, spontaneous photos every day as a complement to text messaging.
Photos aren't just for photographers any more. They have become a form of spontaneous self-expression and instant communication, and now form the backbone of Snapchat's $100 billion business.
The internet also gave people access to a long tail of new hobbies, interests, and niche communities. In a typical small town, there may have only been a few people interested in collecting sneakers, comic books, or remote control cars.
The internet gave those enthusiasts an opportunity to connect and share content with like-minded people they otherwise never would have met. The internet made media social, and the concept of online community sits at the core of Facebook, Twitter, and countless other social media apps.
Before the internet, there was no way to reliably know where people were in real time. This type of information signal wasn't useful enough to overcome the high information transfer costs that existed before the internet.
Today, location tracking is an integral feature in a wide variety of internet apps. Uber uses your information to match you with a driver or deliver your food, Hinge uses your location to match you with singles in your area, Strava uses your location to keep track of your workouts, and Apple uses your location to keep friends and family updated on your whereabouts.
There are countless other examples too, but they are all united by a common theme. Your location is generally a low-value piece of information in isolation. However, when billions of location updates are simultaneously being streamed by everyone, new and valuable use cases emerge.
Tying everything together, the internet's role in enabling instant and free information transfers opened up opportunities for entrepreneurs to move low-value information at a higher scale than ever before.
Though it wasn't valuable enough to be distributed before the internet, it became tremendously valuable at scale when the costs of transmitting information dropped to zero.
Today, the same process of cutting information transfer costs to zero is happening on the Lightning Network, where the costs of transferring value are dropping to zero.
Permissionless, instant, and censorship resistant payments at no cost are a feature unique to the Lightning Network, as every other blockchain or fiat-based payment solution sacrifices either fee scalability, decentralization, settlement time, or open infrastructure to build on.
When communication is free and instant, the long tail of low-value information exchanges flourishes.
Since money is simply a tool for communicating value, it stands to reason that when monetary transactions are free and instant, the long tail of low-value monetary exchanges will flourish too.
Most people can already make $10, $100, $1,000, and $10,000 payments with relative ease, but the Lightning Network enables anyone to make $0.10, $0.01, $0.001, and even $0.0001 transactions at a higher scale than ever before.
Just like the early internet, we are starting to see Lightning applications leverage free and instant transactions for interesting new use cases.
Strike is a great example. Their product leverages the Lightning Network to make international remittances essentially free and instant. They've also managed to cut the cost of buying Bitcoin with fiat money by a factor of 10.
THNDR Games is another example. Their mobile games reward players with small amounts of Bitcoin rather than siloed in-game tokens. Some rewards are as low as a fraction of a penny, a denomination too small to be sent without the Lightning Network.
Fountain is another one. Their podcasting app allows creators to earn small amounts of Bitcoin from listeners for every minute spent listening to a show. Once again, this kind of value streaming would not be possible without the Lightning Network.
There are countless other examples of teams building products that are uniquely enabled by the Lightning Network, it's hard to keep up with the rapid pace of innovation.
Below I've listed a few popular ways to earn Bitcoin through the Lightning Network, which is one of the use cases for Lightning Network payments I'm most excited about.
Earning Sats for Playing Games
Earning Sats for Creating Content
Earning Sats through Messaging
Earning Sats for Completing Tasks
Just like many of the most valuable internet apps today were hard to imagine in the dot-com era, I suspect there are many incredibly valuable Lightning Network applications that sound totally unreasonable today, and even more that can't yet be imagined. Still, I've tried to collect a few more far-out payment use cases that the Lightning Network could bring to life in the future.
The Lightning Network is beginning to find product-market fit, as evidenced by its rapid growth in the last few months. Although the protocol is still relatively young, there are promising signs that the Lightning Network's architecture will enable instant and nearly free payments to and from anyone on a global scale.
If that holds true, I think the Lightning Network will be one of the most transformative technologies of the next decade, and add meaningful value to the Bitcoin network beyond its store of value properties.