Paris, France-based bitcoin technology startup ACINQ has attracted $1.7 million to its coffers in seed capital. The funds will be directed toward bolstering adoption of the Lightning Network, which is a scalable technology designed to bolster transaction speeds and slash fees on the Bitcoin blockchain.
The financing round was led by Serena Capital, according to reports. Other investors include Bertrand Diard, who is the co-founder of Talend, Sebastian Lucas, VC investor Alistair Milne and Snapcar Founder Yves Weisselberger. The most recent funding brings the year-to-date fundraising tally for ACINQ to $2 million. ACINQ, which started working on the Lightning Network in 2015, will direct the funds toward expanding its software developer team and creating new Lightning Network services.
ACINQ Co-Founder and CEO Pierre-Marie Padiou told Coindesk:
“With this raise, we’re very excited to be able to do a lot more with more resources. We’ll be able to make even more cool services for lightning. This is not only good for us but for lightning in general and for pushing adoption forward.”
ACINQ is behind the Eclair Software Suite, which is one in a trio of Lightning software implementations. Eclair introduced the first mobile Lightning wallet in Google’s Play Store, which is wildly popular as evidenced by more than 5,000 downloads of the product.
The Lightning Network is a scaling solution for Bitcoin so the network can handle more transactions. In practice, it should allow an unlimited number of immediate payments at a very low cost. The LN is based on a technology called “payment channels”, which are used to make payments “off-chain”, or outside the Bitcoin blockchain. The big advantage of this is that the transactions are not immediately written to the blockchain (after they have been validated by the miners).
Instead, payments are processed off-chain, which reduces the transaction volume for the Bitcoin blockchain. Instead of writing many smaller transactions on the blockchain, two or more parties can use the payment channel to determine how long they will allow the channel to continue and when the transactions will be included on the blockchain.
If this happens, the parties comprising the payment channel have a private key. Only when both parties sign with their key and thus signal that the transaction is completed will the total amount or the balance be written to the blockchain and the channel closed.
There are currently two other companies currently working to develop the Lightning protocol: Lightning Labs and Blockstream, developments for which remain in a beta test phase.