Strike – A Exchange App, Not a Wallet
Strike is a free mobile app for iPhone and Android that enables users to send and receive Bitcoin globally other the Lightning Network. From the user perspective, Strike works exactly like Venmo, Paypal, and the Cash App. Create an account with Strike. Select someone to pay. Decide how much to pay in US dollars. And the payment is immediately sent. The official website is at https://www.strike.me.
Strike was developed by Jack Mallers (@jackmallers) who is also the CEO of ZAP Solutions. He’s has a very outgoing personality and is the perfect salesman to pitch his app Strike.
Strike is Simplistic
The Strike app’s best feature is simplicity. It bridges the knowledge gap between Bitcoin, the Lightning Network, and Cash. Strike users don’t need any knowledge about either Bitcoin and Lightning because every aspect of Strike is conducted in the user’s local currency.
So when I pay Bob who is also a Strike user $10, that’s all I need to know is his Username on Strike. Behind the scenes, Strike is converting my $10 and sending it over the Lightning Network Wallet Bob’s Strike account. The entire payment costs me next to nothing in fee. Strike charges no fees, but Lightning Network fees (1-2 cents at most) are passed onto the user.
Strike’s low fees are perfect for micropayments.
Strike Payment to any Bitcoin/Lightning Wallet
Strike’s features don’t end with user to user payments. Strike users can also to send funds to any Bitcoin address or Lightning Network address. In the same example with sending Bob $10, if Bob doesn’t have a Strike account, but does have a Bitcoin wallet or a non-Strike Lightning Wallet, I can still pay Bob as long as I have Bob’s preferred address (safest is to scan his QR code). Because both Bitcoin and Lightning are open networks, Strike will forward the payment. Again, Strike charges nothing, but Bitcoin or Lightning fee are passed onto the user.
This is where Strike is different than Venmo, Paypal, and the Cash App. All three example applications are closed applications, meaning even though even though they all hold and transact dollars, their user’s are limited to paying only other user’s within the same app.
Strike vs Cross-Border Remittance
Cross-Border Remittance is expensive. Sending money across borders can cost around 7% of the amount sent and vary country to country (find a listing on cross-border remittance costs). Part of the challenge is cross-border remittance require cooperation between banks on both ends of the transaction. However, this is made more difficult by anti-laundering and Know Your Customer (KYC) regulation add to expenses on the bank. Additionally, the time it takes to transfer money can take up to one day.
On the other hand, Bitcoin has eliminated many of the challenges posed above. Since there’s a very liquid exchange rate between Bitcoin and fiat currencies, Strike can have a partner bank in multiple countries that utilize the exchange rate of Bitcoin to that countries currency. The transaction can then occur over the Lightning Network for near zero fees nearly instantaneously.
As of Nov 2021, Strike is available only in the United States and El Salvador, but Strike is actively beta testing their services in other countries.
Is Strike a Lightning Network Wallet? No!
Strike is not a Lightning Network Wallet. Instead, it’s an app that focuses on exchanging and processing payments instantly over the Lightning Network. Strike does not hold any US dollars, instead it’s held by Prime Trust, LLC. Bitcoin on Strike is also not held by Strike, instead it’s held by Prime Trust, LLC.
So any transfers you make on Strike integrate with Prime Trust to convert to Lightning Network where the transfer occurs.
Strike’s Downsides
With every convenient to use app, users should be aware of the downsides, even if they are considered minor. In most cases, especially for the non-technical user, these trade-offs are well worth the gain.
- Strike payments are most likely processed through their own Lightning Network node. Running transactions through their own Lightning Network node is one way Zap Solutions monetizes Strike. This makes Strike a bit less trust-less.
- Know Your Customer (KYC) is still an issue when you connect your traditional bank account with Strike. After all, you still need to get funds onto Strike before you can use it.
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