Is there any cost reduction of using this method, compared to buying bitcoin from a regular exchange? As I recall taking money in and out of the LN channels still costs the blockchain transaction fee.
Launch HN: Sparkswap (YC S18) – Buy Bitcoin Instantly over the Lightning Network
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Re: Launch HN: Sparkswap (YC S18) – Buy Bitcoin Instantly over the Lightning Network
#12How do you handle ACH clawbacks? What your business models needs to protect against is... hackers steal a victim's private information enough to be able to submit the ACH to you. The victim reports it to their bank several days after the theft. The bank does an ACH clawback from your banking partner.
Where is your time gap to get past ACH clawbacks?
Re: Launch HN: Sparkswap (YC S18) – Buy Bitcoin Instantly over the Lightning Network
#13Any plans to make this less technical and more user friendly (like users not knowing even about lightning network). I think this has a lot of potential if you make it more mainstream by abstracting away the tech stuff.
Yes, that's definitely a goal of ours over time. We're starting with the existing Lightning community, but we plan to continue to reduce the technical requirements so that users don't need to know anything about Lightning to use Sparkswap.
Re: Launch HN: Sparkswap (YC S18) – Buy Bitcoin Instantly over the Lightning Network
#14Is there any cost reduction of using this method, compared to buying bitcoin from a regular exchange? As I recall taking money in and out of the LN channels still costs the blockchain transaction fee.
If you close a Lightning channel (or use a service provider to translate a Lightning payment to an on-chain payment, a common way to "withdraw" from Lightning channels), you will incur a blockchain transaction fee, similar to using regular exchange. You'll have more control over that fee based on your time preference, and importantly, you won't need to incur that fee to make sure that the Bitcoin is actually in your possession.
So it will likely end up about neutral cost-wise (maybe slightly cheaper?) but you'll have more control over the whole lifecycle.
Re: Launch HN: Sparkswap (YC S18) – Buy Bitcoin Instantly over the Lightning Network
#15How do you handle ACH clawbacks? What your business models needs to protect against is... hackers steal a victim's private information enough to be able to submit the ACH to you. The victim reports it to their bank several days after the theft. The bank does an ACH clawback from your banking partner. Where is your time gap to get past ACH clawbacks?
We have guards in place to protect against fraud by verifying your identity in a few different ways, but this is something we'll monitor and make improvements to over time. It's critical to the survival of the business that we have strong fraud detection methods.
However, we also think that the experience of instant transfers is valuable, so on a risk-based approach we allow instant transfers using ACH for certain customers and certain transaction sizes.
Re: Launch HN: Sparkswap (YC S18) – Buy Bitcoin Instantly over the Lightning Network
#16Wow, this was seamless. It auto-detected my lightning wallet, and the purchase was instant.
As far as I know, this is literally the only way to get Bitcoin on lightning directly with USD.
Re: Launch HN: Sparkswap (YC S18) – Buy Bitcoin Instantly over the Lightning Network
#17Congratulations on launching!
How are you handling AML/KYC? Is this something that AnchorUSD will front first, and is there a fee that they take for the deposit? Also -- do you have to restrict usage for certain jurisdictions (e.g. NY state residents)?
Re: Launch HN: Sparkswap (YC S18) – Buy Bitcoin Instantly over the Lightning Network
#18Congratulations on launching! How are you handling AML/KYC? Is this something that AnchorUSD will front first, and is there a fee that they take for the deposit? Also -- do you have to restrict usage for certain jurisdictions (e.g. NY state residents)?
We have an AML program in place and do identity verification on users that want to buy Bitcoin. We are restricted to 22 states in the US right now (which excludes NY state) but we're expanding that number rapidly, and hoping to expand internationally in the coming months.
There are no fees for deposits.
Re: Launch HN: Sparkswap (YC S18) – Buy Bitcoin Instantly over the Lightning Network
#19Is there any cost reduction of using this method, compared to buying bitcoin from a regular exchange? As I recall taking money in and out of the LN channels still costs the blockchain transaction fee.
If you close a Lightning channel (or use a service provider to translate a Lightning payment to an on-chain payment, a common way to "withdraw" from Lightning channels), you will incur a blockchain transaction fee, similar to using regular exchange. You'll have more control over that fee based on your time preference, and importantly, you won't need to incur that fee to make sure that the Bitcoin is actually in your…
You do need to pay to both open and close a channel, so you'll incur two transaction fees in contrast to one with a regular exchange.
Re: Launch HN: Sparkswap (YC S18) – Buy Bitcoin Instantly over the Lightning Network
#20Earlier quoted context omitted.
If you close a Lightning channel (or use a service provider to translate a Lightning payment to an on-chain payment, a common way to "withdraw" from Lightning channels), you will incur a blockchain transaction fee, similar to using regular exchange. You'll have more control over that fee based on your time preference, and importantly, you won't need to incur that fee to make sure that the Bitcoin is actually in your…
You do need to pay to both open and close a channel, so you'll incur two transaction fees in contrast to one with a regular exchange.
Sparkswap opens the channel to the user, so Sparkswap will incur the channel opening and closing fee.