On September 23rd, 2021 Twitter rolled out a new Tipping feature that gives their 200 million strong network of users access to free and instant Bitcoin transfers via the Lightning Network. On the face of it, this could incentivise valuable Twitter content, and be great news for Bitcoin in general, giving the Lightning Network the critical mass it needs to drive wider adoption, but to take advantage, you may need to compromise on privacy.
Twitter CEO, Jack Dorsey, is a big Bitcoin fan, and he’s been hinting for some time that the hugely popular social media platform he oversees would officially integrate with Bitcoin in some way.
Given that background, the announcement in late September that Twitter would essentially become an extension of the Lightning Network wasn’t a huge surprise, but it may not have gotten the attention it deserves.
The timing of the announcement was unfortunate in that it was immediately followed by news from China that they were doubling down on their previous commitments to ban cryptocurrency. Even though China has made that threat countless times since 2013, it sent a shockwave through the market - with pricing tanking - and was widely reported by mainstream media as if it was something completely new, throwing a lot of shade on Twitter’s positive story.
For those that follow Bitcoin closely, Twitter’s announcement is arguably more important. Before we get to why, let’s look at exactly what the Lightning Network is, how it powers Tipping service does and the challenges a blue-chip publicly listed US company has with handling Bitcoin’s principles of decentralisation and privacy.
Though for most users Twitter is a source of news, entertainment and engagement, there is a significant number that want to use it as a way to generate an income.
You may have noticed that people you follow provide payment details in their Bio as a way of allowing followers who value the content they generate enough to Tip them. This model is essentially what turned OnlyFans into a billion dollar business in next to no time.
Within crypto Twitter, the unofficial space where everything crypto related happens on Twitter, this simply means providing an address for Bitcoin, Ethereum or any other cryptocurrency.
Twitter’s recent announcement formalises that Tipping process into a platform feature, currently available for iOS only in the US and El Salvador. Here’s how it works.
Anyone with a Twitter account can enable Tips via their profile - it is set to ‘off’ by default. Once enabled you’ll be asked to agree to Twitter’s General Tipping Policy.
You may be tempted to simply agree and move on, but it is worth reading. It is relatively short and contains some important details relating to what information you may be sharing by using the service.
Once enabled you simply need to associate your Twitter profile with the third-party service selected to connect to the Lightning Network, which is called Strike.
Strike and their charismatic, hoodie-wearing CEO, Jack Mallers, have made a name for themselves by playing a central role in helping El Salvador’s adoption of Bitcoin as legal tender, and the use of the Lightning Network as an alternative to the likes of Western Union to cut down on the cost of remittance.
Though the idea of a free, decentralised payment option for instantly tipping or transferring money via Twitter sounds very exciting, there are some catches.
The most obvious is that to use Strike you must provide KYC. Once your account has been created your Username will be what other Twitter users will see when they want to tip you, and this warning from Twitter’s General Tipping Policy suggests that might not be all:
Recipients will be able to see your username on that service. Information about you, including, but not limited to, your full name, address and your tip may be shared with the recipient or others, subject to the terms of the third-party payment service.
Given that many people use Twitter anonymously and provide valuable content - not just trolls or scammers - this KYC element will be of concern, because it could make your Twitter account pseudonymous rather than anonymous.
Here are some other points worth noting:
Strike and the Lightning Network isn’t the only way to Tip other Twitter users with crypto. You can avoid the KYC issues by simply providing a Bitcoin address (or any other crypto for that matter) which anyone wanting to Tip can use through any external wallet. Though to be honest, that is how things work right now with addresses in Bios, except the new approach is a bit more discrete.
Though to Bitcoin users providing KYC is like garlic to a vampire, it is an almost unavoidable reality for the ‘on ramp’ process - depositing your dollars, pounds or euros with exchanges so you can trade them for crypto. This is no different, and there is plenty of upside.
Your Strike account gets you access to the Lightning Network, which is instant and costs only a few Sats, but also simplifies the user experience, which via native Lighting wallets is a little trickier than Twitter/Strike have made it.
Anyone who is watching the battles going on around the world to regulate the crypto space knows that in order to achieve adoption there will need to compromise. Viewed in that light, Twitter using the Lightning Network to enable Tipping is a huge win, even accepting the need for KYC and issues around privacy.
This feature was made possible because Strike, which started as a Mobile App, developed an open API. Twitter Tips are the first use case, and that only covers iOS users in the USA and El Salvador. There is so much more potential, which can only be good news for Bitcoin adoption and growth of the Lightning Network.