Uma Extend brings Lightning and bank account together
A Huge Thunderstorm Close to Port Hedland (Western Australia) Lighting Bushfires Everywhere. I have waited for this photo since a long time. Image of Diamond T Design via Flickr.com. License: public domain
Lightspark wants to make the Lightning serious. With a new feature, it tries to connect the offchain network for Bitcoin to banks. But that doesn’t have much to do with Bitcoin itself.
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Light Spark, the Lightning startup by David Markus, formerly PayPal and Facebook, presents a new feature: “Uma extend”. This allows users and companies to connect a bank account to the Lightning network in order to receive Lightning payments directly on it.
Uma extend builds on the “Universal Money Address” (UMA)-an email-like address for Lightning transactions developed by Light Spark. The vision of LightSpark is that Lightning is not only the payment network for Bitcoin, but for every currency.
With UMA, users receive an email-like address that you can connect to a wallet, banks or stock exchanges. The money sent, regardless of which currency, is first converted into Bitcoin, then transported via the Lightning network and then exchanges them into the target currency if this is different.
UMA is already available in 120 countries, writes Lightspark. Companies like coins.Ph in the Philippines, Ripio in Latin America, YouHodler in Europe and many others are already using UMA. Also stocks we Coinbase have integrated software from LightSpark, which should take the step towards Uma extend relatively easy.
The announcement by Light Spark does not reveal exactly how exactly Uma extend works under the hood. However, it provides some details from which we can derive more: If you want to use the service, you must first register for a UMA address. This means that he has to register comprehensively, release his telephone number for the two-factor authentication and then verify with his ID. Then he can connect his bank account – presumably without the bank’s knowledge – and automatically receive money via Lightning. Payment flows via the Bitcoin Wallet and the Vero Hash, a partner of Light Spark.
Institutions such as stock exchanges that want to send Fiat money via the UMA protocol via Lightning-which is certainly attractive for many, especially with cross-border customers-must have already set up a lightning integration beforehand. The prerequisites are therefore relatively high, and the hurdles for users, such as verification, should not make UMA particularly attractive to them.
However, the service could be interesting for companies, especially if how globally send money or want to accelerate and automate transactions to banks.
Of course, all of this has much to do with the actual properties of Bitcoin. Bitcoin is neither sent nor do the users remain anonymous or pseudonym. It’s just about bringing money from one bank to another. Bitcoin is nothing more than an obstacle that is necessary in the way.
