How to buy bitcoin on the Lightning Network with e-Transfer

Before we dive in to exactly how to buy bitcoin on the Lightning Network, I want to dive in to a brief and high level explanation of what the Lightning Network is, and why it’s useful. If you are really just hoping for the step by step guide, click here!

What is the Lightning Network?

Bitcoin is uniquely positioned to be both a store of value and a payment network. Historically, we’ve only ever had one or the other. Gold/silver/oil as a store of value, and cash/bank tokens for easy of transacting. The logic was pretty simple, difficult to shave off the right amount of gold to buy a coffee, so use a medium of exchange instead. 

Of course, centuries later we have completely evacuated the “store of value” concept, and think the medium of exchange is the store of value. We’ve even gone as far as to call the store of value units “investing”. The whole concept is backwards, but that’s a topic for another day. 

Bitcoin enables us to have both. It is a store of value, mathematically programmed to store your value with a payment rail built in. The problem is, the payment rail is slow. There is some nuance that I can get into that actually shows you how much faster bitcoin is compared to visa/mastercard, they’ve just done a good job of hiding that to the end user.

Anyways, the Lightning Network was brought in to solve this problem for Bitcoin. It is essentially a secondary highway that is a only possible to get onto from the Bitcoin network. This means that transactions can settle instantly (literally instantly) with the designated Lightning Network (LN) nodes verifying the transaction in real time and requiring very little energy to do so.

How to use LN bitcoin

Custodial vs non-custodial Lightning Network environments

If you’ve been following me for any amount of time you’ll know that I advocate for self custody. We are a non-custodial bitcoin platform. We literally force our customers to take ownership of their bitcoin. It’s in our DNA. That said, as I’ve watched Bitcoin mature, and I’ve started to look at all the different ways people use bitcoin. As the network grows, the cost to send bitcoin (the main highway, if you will) goes up. Therefore, the need to use the secondary highway becomes more viable. In other words, the need to use the Lightning Network is growing. 

Similar to Bitcoin, there is a custodial and a non-custodial way to use the Lightning Network. The tradeoffs are similar in that using the Lightning Network in a custodial environment carries more counter party risk (your money can be stolen much easier). However, if we equate our Lightning Network usage to that of a “spending account”, those risks might be manageable in the grand scheme of things.