Chainalysis to Offer Lightning Network Monitoring Service to VASPs in 2022

Chainalysis to Offer Lightning Network Monitoring Service to VASPs in 2022

On December 10, the blockchain intelligence firm Chainalysis revealed that the company has added support for Bitcoin’s second-layer protocol the Lightning Network (LN). According to Chainalysis, firms like exchanges and virtual asset service providers (VASPs) can leverage the company’s Know-Your-Transaction (KYT) real-time transaction monitoring software in order to access compliant bitcoin deposits and withdrawals from a LN node.

Compliant Lightning Transactions

The blockchain surveillance and intelligence company, Chainalysis, announced on Friday that the company has added Lightning Network (LN) support to its list of blockchain and crypto-asset networks, the company currently monitors. For years, Chainalysis has monitored the Bitcoin (BTC) blockchain, and these days the firm is not only monitoring BTC, but also a myriad of crypto networks and decentralized finance (defi) protocols.

Essentially, the LN is an offchain routed “layer 2” (L2) payment channel network that helps facilitate bitcoin (BTC) transfers faster and cheaper than onchain transactions. The Chainalysis LN support will provide VASPs with “Chainalysis KYT (Know-Your-Transaction) for real-time transaction monitoring will now be able to compliantly allow deposits and withdrawals of Bitcoin from a Lightning node.”

As of December 1, 2021, Chainalysis estimates there is “just under 3,600 BTC worth over $205 million is locked in public Lightning Network channels.” This has increased a great deal since the total value locked in the LN was around 468 BTC on January 1, 2021. Chainalysis also mentions that the LN L2 system is leveraged by countries such as El Salvador and large corporations like Twitter. Pratima Arora, the chief product officer at Chainalysis explains that the firm hopes compliant LN transfers will help the LN mature.

“Chainalysis exists to build trust in cryptocurrency in order to promote more financial freedom with less risk,” Arora said in a statement. “The Lightning Network solves many of the challenges that prevent the Bitcoin protocol from being used for micropayments and other transaction types that bolster financial inclusion. By enabling our customers to compliantly support Lightning transactions, we hope to grow the network’s popularity and help it scale.”

Lightning Network Support for Chainalysis KYT Customers to Launch in February

Chainalysis has expanded its resources a great deal and faces dozens of blockchain intelligence and monitoring competitors. The company raised $100 million at the end of June in its Series E funding round and the previous C and D rounds also saw $100 million capital injections. The company’s post valuation, after the Series E, was $4.2 billion according to the firm’s announcement at the time.

Speaking about the LN support, Chainalysis claims that for the first time, “VASPs can now offer support for Lightning transactions aligned with global regulatory best practices.” The product Chainalysis offers called Chainalysis KYT supports “pre-screening for Lightning withdrawals and behavioral alerts.” The blockchain surveillance and intelligence company further says that the LN support will be available for Chainalysis KYT customers in February.

What do you think about Chainalysis adding Lightning Network support? Let us know what you think about this subject in the comments section below.

Reddit Introduces ETH-Based Community Points Beta Program With Custom Tokens for Subreddits

Reddit Introduces ETH-Based Community Points Beta Program With Custom Tokens for Subreddits

The popular forum and news aggregation web portal Reddit has revealed the firm’s Community Points beta program where Reddit users can “own a piece” of their community with “custom tokens” for subreddits.

Blockchain-Backed Reddit Community Points: ‘The First Step Towards a Different Future for Online Communities’

At the end of July, Reddit announced that the platform’s Community Points system would leverage the Layer 2 (L2) protocol Arbitrum. This week, Reddit revealed a new website that features the Community Points beta program, which says that Reddit patrons will be able to leverage native crypto assets tethered to unique subreddits. At the time of writing, there is a waitlist and users can sign-up via a form Reddit created.

“Community Points are the first step towards a different future for online communities,” Reddit’s description of the new beta program notes. “These tokens live on the blockchain, which means they are truly owned by the community. Over time, your community will benefit from even greater control and independence… on and off of Reddit.”

Reddit says that users can “Earn something valuable for all the hours you put into your community, [and] unlock special features.” Redditors can “buy community features with Community Points, like special memberships and awards, [and] encourage better content and conversation,” the company details. Furthermore, Redditors can use polls and systems to figure out the Community Points distribution process. Reddit’s website adds:

Each subreddit creates its own Community Points token, with a custom name and symbol.

Cryptocurrency Subreddit Likes the Community Points Concept, Most Popular Bitcoin Subreddit May Not Be Too Fond of Ethereum-Based Subreddit Tokens

In addition, Reddit says that people can “own” their reputation as the points system will be a “measure of reputation” in a certain community. “In the subreddit, they are displayed next to usernames, so the biggest contributors stand out from the crowd,” Reddit explains. Community Points have been discussed in specific forums like the subreddit r/cryptocurrency and a great number of the subreddit’s subscribers liked the idea.

It will be interesting to see whether or not r/bitcoin implements a Community Points token as discussions of alternative crypto assets are banned from that subreddit. Moreover, many r/bitcoin subscribers are not too fond of the blockchain Ethereum so using it for a Community Points system could be considered hypocritical. It’s safe to say that many other crypto and non-crypto-related forums on Reddit will likely have no issues using the Ethereum-based Community Points program.

What do you think about Reddit introducing the new Community Points program where subreddits will be able to create their own custom tokens? Let us know what you think about this subject in the comments section below.