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Blockchain Startup Lightning Labs Secures $2.5M in Seed Funding

Many Silicon Valley investors are putting their money behind blockchain start-up Lightning Labs. The company announced that it has raised $2.5 million in seed funding to date from numerous big names in payments and beyond, including Square and Twitter co-founder Jack Dorsey, Square exec Jacqueline Reses, serial-founder-turned investor David Sacks, Litecoin creator Charlie Lee, Eventbrite co-founder Kevin Hartz, BitGo CTO Ben Davenport and Robinhood co-founder Vlad Tenev, along with The Hive, Digital Currency Group and others.

Lightning Labs CEO Elizabeth Stark says Lightning functions as a software layer that sits on top of the bitcoin network.

This week was the first Lightning beta release on the bitcoin network. “Lightning will be rolled out first to advanced users and developers … and then broader users,” Stark said.

According to this cryptocurrency exchange, more than 1,800 developers are part of her company’s Slack channel and that thousands of volunteers helped Lightning’s seven-person team find glitches in the alpha version of its open-source software.

“One thing we’ve learned is that it can be hard to predict bitcoin fees in advance, and there may be large swings, so having a solution like Lightning with very low fees on the network is key,” said Stark. “You still pay on-chain bitcoin fees when getting on or off of Lightning, but that may happen infrequently, like once a month or year.”

Further, Lightning can allow users to take advantage of low bitcoin fees when they are cheap, while often avoiding fees when they’re high, thus actually helping to stabilize on-chain bitcoin fees in the future,” Stark said.

Lightning Labs’s technology is available on desktops only, with a mobile version coming soon.

Source: This article originally appeared in CNBC