<h2>What is Strike?</h2>
Strike is your best way to Bitcoin.
It’s your gateway to a borderless money experience for saving, spending, sending, and receiving, made possible through Bitcoin.
<img src="https://www.datocms-assets.com/99305/1704980440-learn-what-is-strike-state-hero.png" alt="" />
Our unending pursuit of better money ultimately leads to <a href="http://strike.me/learn/what-is-bitcoin">Bitcoin</a> – the global system for peer-to-peer electronic cash. Bitcoin is money that’s free from manipulation and obstruction, providing a savings technology that’s open to everybody, yet controlled by nobody.
Bitcoin also provides payments infrastructure for the world. People and businesses can convert their money into bitcoin, send it globally, and convert it out again whenever they want. With Bitcoin’s <a href="https://strike.me/learn/what-is-the-lightning-network/">Lightning Network</a>, money can now flow faster than ever, at low-to-no cost, and without borders. The frictions that obstruct our finances, ranging from arbitrary inflation to unfair fees and limits, are remedied through Bitcoin and Lightning.
Bitcoin is a new money system based on rules, not the whims of rulers.
By building on Bitcoin and Lightning, Strike enables you to transact with cash and bitcoin in ways that are simply impossible in legacy systems. Your money can move across borders, apps, and currencies, in unprecedented amounts and speeds. And in bitcoin, you can now save in the hardest money on earth.
Strike is for better payments and better money — unobstructed, interoperable, global, secure, and fair.
Rules, not rulers.
Pawn to E4.

Strike is for better payments and better money

What is Strike?

## Lightning as a payments network
The Lightning Network was proposed in 2015 as a payments network for transacting bitcoin *outside* the Bitcoin blockchain.

Essentially, the Lightning Network is a way to transact bitcoin faster, cheaper, and more privately than on the Bitcoin blockchain. 

![](https://www.datocms-assets.com/99305/1702580934-what-is-the-lightning-network-01.png)

Unlike legacy networks for inter-bank cash transfers or credit and debit card payments, the Lightning Network offers instant settlement, no chargebacks, and uses bitcoin as the underlying asset. 

It helps solve a key obstacle for Bitcoin, mainly the ability to scale to lots of users making lots of payments. Whereas the Bitcoin blockchain is designed first and foremost for security and decentralization, the Lightning Network is designed for speed, cost, and volume of payments. 

Lightning is a new kind of payments network, one that’s borderless, open, low-cost, and instant.

## How does the Lightning Network work?
The Lightning Network is kinda like the Bitcoin Network, in that it’s made up of computers (nodes) all running the Lightning Network software. Unlike Bitcoin, Lightning transactions aren’t publicly broadcast on the blockchain; instead they’re made privately and directly between nodes. 

Also like Bitcoin, the Lightning software is a standardized set of rules (aka protocol) that’s open and free to use for anyone or any company who wants to join.

So how does it work?

It all starts with bitcoin. Every bitcoin on Lightning begins with a transaction on the Bitcoin blockchain. That on-chain transaction is shared between two parties and serves as the reference point to start transacting *outside* the blockchain. 

With that on-chain bitcoin secured, the two nodes can then open a payment “channel” – a peer-to-peer connection through which bitcoin can be transacted. It’s like a direct link between two computers that update their own mini, private bitcoin ledger, with the start of their ledger being that first on-chain transaction. 

In their channel, they can transact as fast and often as they want by simply updating their private record, and when they’re done, they can close the channel by settling the original on-chain transaction. 

It’s like opening a tab at a bar, so that you don’t have to pay the bartender each time you buy a drink. Once you open the tab, you can order lots of drinks and just have the tab updated each time. At the end of the night, you make one single payment to settle up. 

It’s the same with Lightning. One on-chain transaction to start, countless off-chain transactions, and one on-chain transaction to close. 

What’s more, each node can open as many channels with as many nodes as they want, forming a global web of connections. Through this web, nodes can “route” payments to other nodes, even if they’re not directly connected. This means person A can send to person C, via their shared connections with person B. These *indirect* payments open a global network of payment possibilities, since each node can be indirectly connected with every other node in the network.

Lightning is a peer-to-peer payments network that helps scale the Bitcoin blockchain, without making tons of on-chain transactions.

![](https://www.datocms-assets.com/99305/1702580946-what-is-the-lightning-network-03.png)

## Lightning and global money transfers
Lightning helps deliver instant, low-cost, and interoperable payments for the world.

Payments routed via Lightning move at lightspeed. When they arrive, they’re final. Instant plus final is what legacy networks can’t do. Legacy cash payments sit in “pending” status for days, with the risk of failing or reversing, adding to merchants’ costs and headaches. 

On top of that is Lightning’s extreme low cost. Lightning payments are just information sent between computers, which costs little to nothing. When indirect payments are routed, a routing fee is paid to any in-between nodes, and those fees are typically a couple satoshis (a fraction of a penny). Payments themselves can be that small, unlocking new possibilities for micro-payments. Compare that to card payment processors, who take a couple percent per transaction in fees and can’t practically process penny transactions (let alone sub-penny amounts).

What’s more is Lightning’s interoperability. Like Bitcoin, Lightning is an open protocol, which means any person, any company, or any app can join and start making Lightning payments themselves. It’s the opposite of how bank or card networks operate, which are closed and don’t allow people to hold electronic money themselves.

With Lightning, you can make payments across apps, for less than a penny, and the payment will be instantly spendable. 

To really get it, you have to see a Lightning app in action. 

People send payments from Miami to Mumbai, via Manila, Mexico City, and Munich. Each person uses a different app, each transaction is sent for fractions of a penny, each payment is finalized and immediately spendable. No 1-5 business days, no bank holidays, no manual approvals, no opaque fees. Secure global payments that just work. 

And since bitcoin is traded 24/7/365 across all major currencies, you can use cash to buy bitcoin, send via Lightning, and sell back into cash. That’s exactly what the Strike app and Strike API do. 

The Lightning Network is a new standard for payments. 
It’s fair — nobody has privileged access.
It’s global — across the street as across the world.
It’s interoperable — across apps, across companies, across borders.
It’s secure — it all begins and ends with Bitcoin, verifiably secure and scarce.

The global bitcoin payments network that’s instant, private, and low-to-no cost 

What is the Lightning Network?

The Bitcoin supply schedule is the preprogrammed pace at which bitcoin are issued into circulation.

This schedule began at zero when Bitcoin was launched on January 3rd, 2009 and is steadily progressing towards the terminal supply limit of 21 million bitcoin in the year 2140.

![](https://www.datocms-assets.com/99305/1710202382-learn-what-is-the-bitcoin-supply-schedule-state-hero.png)

When Bitcoin was launched as peer-to-peer electronic cash, there needed to be a way to distribute the bitcoin into circulation. The solution to this challenge was to pair bitcoin distribution with the processing of transactions, in a system commonly called “Bitcoin mining”. 

Mining is the process whereby computers compete in successive lottery-style competitions to win the rights to add the next block of transactions to Bitcoin’s blockchain and get paid a bitcoin reward for doing so. That bitcoin reward comes in two parts:
* **Block subsidy:** The amount of newly issued bitcoin entering circulation 
* **Transaction fees:** The bitcoin fees paid by individuals to get their transaction added to the blockchain more quickly

The block subsidy is how bitcoin enters circulation.

The subsidy amount and all other [supply-related rules](https://strike.me/learn/how-does-bitcoin-work) are encoded in the Bitcoin software. The basics of these rules are as follows:
* **Start at 50:** At launch, the block subsidy was set at 50 bitcoin per block.
* **Halvings:** Every 210,000 blocks, the block subsidy is automatically reduced by half – an event known as a “[halving](https://strike.me/learn/what-is-the-bitcoin-halving).”
* **10-minute blocks:** The Bitcoin software targets a 10-minute block time.
* **Divisibility limit:** Each bitcoin can be subdivided into 100 million sub-units called “[satoshis](https://strike.me/learn/what-are-satoshis/)” (₿0.00000001), which are indivisible. 

The result of the supply rules is a type of schedule, which sets the quantity and timing of bitcoin’s supply issuance – the “supply schedule.”

## How is Bitcoin’s supply schedule calculated?
Bitcoin’s supply schedule isn’t based on time, but rather on blocks. 

The Bitcoin software targets block times of 10 minutes. When more computational power is deployed by miners, blocks can occur faster than 10 minutes, since more computation means increased likelihood of winning the “lottery-style” competition. To compensate, the Bitcoin software automatically re-adjusts the difficulty of mining every 2,016 blocks (called the “difficulty adjustment”) to maintain an average block time of about 10 minutes.

This means the timing of future blocks are projections, which depends on how much or little computational power is deployed by miners over time. Therefore, Bitcoin’s supply schedule doesn’t exist as a calendar with dates set in stone, but as a set of rules that take into account certain variables.

The calculation of the supply can be expressed in terms of a mathematical equation:

![](https://www.datocms-assets.com/99305/1713370060-bitcoin-supply-equation-t2.png)

Let’s break this equation down into simple terms:
* ∑: This is the symbol for a summation equation
* i: The current halving cycle of Bitcoin
* 0: The initial cycle is set at zero
* 32: The number of cycle repetitions
* 210,000: The number of blocks during each cycle, or "epoch"
* 50: The maximum allowable block subsidy for the first epoch
* /2: The halving, whereby the block subsidy is reduced by half

In this formula every 210,000 blocks the cycle (“i”) increments by one, meaning the 1st epoch's maximum block subsidy is set at 50/20 (50), the 2nd is 50/21 (25), the 3rd is 50/22 (12.5), and so on. There are 33 total halving cycles, since the initial cycle starts at 0 and repeats 32 times.

## When do Bitcoin halvings occur? 
The exact dates of future halvings are projections, since they are based on blocks rather than time and blocks can occur slightly faster or slower than 10 minutes, depending on mining activity. Bitcoin’s supply schedule can be shown in table format. 

| **Year** | **Epoch** | **Halving** | **Block** | **Block subsidy** | **Supply at epoch’s end** |
|------|-------|---------|---------|----------------|--------------------------------|
| 2009 | 1 | 0 | 0 | ₿50 | ₿10500000 |
| 2012 | 2 | 1 | 210000 | ₿25 | ₿15750000 |
| 2016 | 3 | 2 | 420000 | ₿12.5 | ₿18375000 |
| 2020 | 4 | 3 | 630000 | ₿6.25 | ₿19687500 |
| 2024 | 5 | 4 | 840000 | ₿3.125 | ₿20343750 |
| 2028 | 6 | 5 | 1050000 | ₿1.5625 | ₿20671875 |
| 2032 | 7 | 6 | 1260000 | ₿0.78125 | ₿20835937.5 |
| 2036 | 8 | 7 | 1470000 | ₿0.390625 | ₿20917968.75 |
| 2040 | 9 | 8 | 1680000 | ₿0.1953125 | ₿20958984.375 |
| 2044 | 10 | 9 | 1890000 | ₿0.09765625 | ₿20979492.1875 |
| 2048 | 11 | 10 | 2100000 | ₿0.04882812 | ₿20989746.0927 |
| 2052 | 12 | 11 | 2310000 | ₿0.02441406 | ₿20994873.0453 |
| 2056 | 13 | 12 | 2520000 | ₿0.01220703 | ₿20997436.5216 |
| 2060 | 14 | 13 | 2730000 | ₿0.00610351 | ₿20998718.2587 |
| 2064 | 15 | 14 | 2940000 | ₿0.00305175 | ₿20999359.1262 |
| 2068 | 16 | 15 | 3150000 | ₿0.00152587 | ₿20999679.5589 |
| 2072 | 17 | 16 | 3360000 | ₿0.00076293 | ₿20999839.7742 |
| 2076 | 18 | 17 | 3570000 | ₿0.00038146 | ₿20999919.8808 |
| 2080 | 19 | 18 | 3780000 | ₿0.00019073 | ₿20999959.9341 |
| 2084 | 20 | 19 | 3990000 | ₿0.00009536 | ₿20999979.9597 |
| 2088 | 21 | 20 | 4200000 | ₿0.00004768 | ₿20999989.9725 |
| 2092 | 22 | 21 | 4410000 | ₿0.00002384 | ₿20999994.9789 |
| 2096 | 23 | 22 | 4620000 | ₿0.00001192 | ₿20999997.4821 |
| 2100 | 24 | 23 | 4830000 | ₿0.00000596 | ₿20999998.7337 |
| 2104 | 25 | 24 | 5040000 | ₿0.00000298 | ₿20999999.3595 |
| 2108 | 26 | 25 | 5250000 | ₿0.00000149 | ₿20999999.6724 |
| 2112 | 27 | 26 | 5460000 | ₿0.00000074 | ₿20999999.8278 |
| 2116 | 28 | 27 | 5670000 | ₿0.00000037 | ₿20999999.9055 |
| 2120 | 29 | 28 | 5880000 | ₿0.00000018 | ₿20999999.9433 |
| 2124 | 30 | 29 | 6090000 | ₿0.00000009 | ₿20999999.9622 |
| 2128 | 31 | 30 | 6300000 | ₿0.00000004 | ₿20999999.9706 |
| 2132 | 32 | 31 | 6510000 | ₿0.00000002 | ₿20999999.9748 |
| 2136 | 33 | 32 | 6720000 | ₿0.00000001 | ₿20999999.9769 |
| 2140 | 34 | 33 | 6930000 | ₿0 | ₿20999999.9769 |

Some notes on the supply schedule:
* In the 1st epoch, 50% of all bitcoin were issued when the block subsidy was 50/block. Similarly, in the 2nd epoch, 25% of bitcoin were issued when the block subsidy was 25/block, and so on.
* The final “halving” that occurs in the year 2140 is actually a 100% reduction in the block subsidy, and will be the start of the final epoch, which lasts indefinitely. Bitcoin miners will henceforth be incentivized exclusively through transaction fees.
* Each halving reduces the block subsidy by exactly half up until the 10th halving, when it becomes impossible to do so, since the preceding subsidy is an odd number and satoshis are the indivisible amount of Bitcoin. As a result, the 10th halving reduces the block subsidy by 50.00000512%. In technical terms, this is due to Bitcoin using a bitwise shift operator.
* There are 10 halvings where the subsidy is reduced by slightly more than 50%: the 10th, 13th, 14th, 15th, 16th, 17th, 19th, 26th, 28th, and 30th.
* Due to certain halvings reducing the subsidy by more than 50%, the [terminal bitcoin supply](https://strike.me/learn/how-many-bitcoin-are-there/) is actually 20,999,999.9769, which most people simply refer to as 21 million.

The pre-programmed pace from zero to 21 million

What is the bitcoin supply schedule?

A Lightning invoice is a payment request used in Bitcoin’s Lightning Network. It usually appears as a scannable QR-code and contains all the necessary information to send a bitcoin payment from one Lightning-enabled wallet app to another. 

![](https://www.datocms-assets.com/99305/1715906702-learn-what-is-a-lightning-invoice-state-hero.png)

Lightning Network invoices (aka “LN invoices”) are how payments are made within the [Lightning Network](https://strike.me/learn/what-is-the-lightning-network). The Lightning Network is a second-layer on top of the Bitcoin blockchain, which enables real bitcoin transactions to be made faster and cheaper than on “on-chain” transactions. It’s able to do this through a global network of peer-to-peer connections, called “channels,” through which real payments can be routed instantly and privately.

If you’re making a payment or a purchase using bitcoin, including amounts ranging from less than $0.01 to a few hundred or thousand dollars, Lightning is often the fastest and cheapest way to go.

Whenever a transaction is made within the Lightning Network, it’s done using a Lightning invoice. A Lightning invoice is a compact, encoded form of payment instructions, which can be shown as a QR-code for easy sharing and scanning. The QR code is just a representation of the invoice, which is actually a string of alphanumeric characters (letters and numbers) that contain the encoded payment instructions.

The payment process for Lightning typically works like this:
1. The payee enters a payment amount to request using their Lightning-enabled wallet app
2. Their wallet app generates a Lightning invoice and displays it as a QR code
3. The payee shows or shares this QR code with the payer
4. The payer scans the QR code with their Lightning-enabled wallet app
5. The payer reviews and confirms the payment in their app
6. The payment is sent and delivered at lightspeed via the Lightning Network

The whole process can be done in a matter of seconds, which is ideal for person to person payments or day-to-day purchases.

## What’s in a Lightning invoice?
Lightning invoices are encoded with the necessary details for making the payment, such as the payment amount, destination, timestamp, and authorization information. 

To make a payment with a Lightning invoice, you don’t need to understand the details of the invoice. Your wallet app will decode the information and then prompt you to either confirm or deny the payment amount. Below is an example of a Lightning invoice:

`Lnbc2m1pnrjd6epp5xg37tadmcc479dt8c3rqk9mu4p08y8a5uvdd4repy4r8zzs40y4qdqqcqzzsxqrrs0fppqhsrcf2xszcp9nu4xgxzjwx6m3qnvlvrtsp5nft6epu8wxaxytyadq95ygyqvewuhuqh4zw6wevwvufxjr0zc0qq9qyyssqtafnv4cz4uuccg8xfw0ec2lgmr9u23rg85ac86zdnkn4mkq93krn283prlthqky5ujpv8x4cecs4634uu4gcw4f57l3haur8vg6myggp7z6erh`

Although it may appear random and complicated, we can break it down. 

A few important things to know about Lightning invoices:
* **Encoded:** They use bech32 encoding, which is a type of encoding that features built-in error detection, case-insensitivity, succinctness, and scalability.
* **Standardized:** The format follows standard rules, known as “BOLT” ([Basis of Lightning Technology](https://github.com/lightning/bolts/blob/master/00-introduction.md)), which is publicly available and free to use so that anyone, anywhere can build their own Lightning-enabled bitcoin app.
* **Tamper-resistant:** If a single character is changed or omitted, the invoice will be invalid, which is useful to protect against manipulation or error.
* **Efficient:** Invoices can be quickly and easily generated, shared, decoded, and processed by any Lightning-enabled wallet app.
* **Scalable:** Invoice amounts can range from fractions of a penny to multiple whole bitcoin (provided there’s sufficient channel capacity), and can contain a variety of optional features.

So what do all those letters and numbers mean?

Lightning invoices can be broken into two main parts: the human readable part and the data part. These two parts are separated by the character “1” found near the beginning of the invoice.

The human readable part: “lnbc2m”
* **“lnbc”:** This is the standard Lightning prefix, with “ln” standing for “Lightning Network” and “bc” standing for bitcoin
* **“2m”:** This is the payment amount. The “m” suffix stands for “milli-bitcoin” (aka 100,000 [satoshis](https://strike.me/learn/what-are-satoshis)), which means “2m” is equal to 200,000 satoshis. Amounts can also be set as “u” for micro-bitcoin (aka 100 satoshis), “n” for nano-bitcoin (aka 0.1 satoshis), or “p” for pico-bitcoin (aka 0.0001 satoshis).

The data part: all the rest
* **Timestamp:** The time at which the invoice was created.
* **Payment hash:** A cryptographic hash of the payment preimage, which is used to verify that the correct payment has been made.
* **Public key of the payee’s node:** This is the destination of the payment
* **Description:** An optional note explaining the purpose of the invoice, which can be displayed to the payer.
* **Expiry time:** An optional time at which the invoice is no longer valid.
* **Routing information:** The optional information for how the payment can be routed through the Lightning Network.
* **Fallback address:** An optional Bitcoin address included to make a payment on-chain if the off-chain payment fails.
* **Signature:** To maintain security, the entire invoice is signed by the recipient’s node. This signature, which includes the human readable and data parts (minus the signature itself,) verifies that the invoice is genuine and that the payment is sent to the correct recipient.

If someone modifies or makes an error in copying the invoice, the signature will be invalidated. This helps prevent mistakes and manipulation of the information, such as the node ID, payment hash and fallback address, which if they were modified would let someone steal funds.

The structure of Lightning invoices is designed so that payments are robust, flexible, and accommodate various optional features without complicating the payment process. You can read all about Lightning invoices and how they work in the [Lightning documentation](https://github.com/lightning/bolts/blob/master/11-payment-encoding.md).

![](https://www.datocms-assets.com/99305/1712088217-blog-migrating-a-ln-node-01.png)

## What are zero-amount or “amountless” Lightning invoices?
A zero-amount invoice is a type of Lightning invoice that doesn’t specify an amount for the payment. This is a flexible feature that allows the payer to decide how much to send. 

Zero-amount invoices are particularly useful for certain situations:
1. **Donations:** Payees can create invoices, which don’t specify an amount, allowing the payer to enter how much or little they want to send.
2. **Variable payments:** For pay-as-you-go or metered services, zero-amount invoices let payees generate invoices that can flexibly accommodate payments of unknown or changing amounts.
3. **Promotional payments:** Businesses can let customers pay what they want or offer a promotional program where different payment amounts result in different products or services rendered.

Not all Lightning-enabled wallet apps support zero-amount invoices since they require additional steps of communication between the payer and payee’s wallet apps.

## How to use Lightning invoices in the Strike app
The [Strike app](https://strike.me/download) is a fully functional Lightning-enabled bitcoin wallet. It lets you receive payments by generating Lightning invoices, including zero-amount invoices, as well as send to any other wallet’s Lightning invoice. 

With the Strike app you can also create Lightning invoices for either cash or bitcoin amounts, and the Strike app will receive the funds as you specified.

### Receiving bitcoin
To receive a bitcoin payment via the Lightning Network, visit your Bitcoin screen and tap the “Receive” button, then “Bitcoin wallet.”

By default, the Strike app will generate a zero-amount Lightning invoice, which is ready to be scanned or can be shared by copying the invoice’s string of characters and sending via instant message or email. You can edit the amount of the invoice by tapping the “Edit” button, which will generate an entirely new invoice to be scanned or shared. Also, the Lightning invoice will have a default expiry time, shown in the top right-corner of the invoice screen.

### Receiving cash
The process of receiving a cash payment via the Lightning Network follows the same steps as a bitcoin payment, except for a few key differences:
1. The process begins on your Cash screen, rather than your Bitcoin screen
2. If you specify a cash amount for the invoice, the invoice’s expiry time will be shorter, since it involves a temporary cash-bitcoin conversion rate.
3. The payment will be converted to cash and delivered to your cash balance.

The Strike app also lets users send and receive payments using [Lightning addresses](https://strike.me/learn/what-is-a-lightning-address), which can be a more familiar and intuitive way of transacting via Lightning.

Bitcoin payment requests within the Lightning Network

What is a Lightning invoice?

## Cash –> Bitcoin –> Cash
Send Globally is a feature in the Strike app that lets you send cash through the [Bitcoin Lightning Network](https://strike.me/learn/what-is-the-lightning-network) and have it delivered as local currency to bank or mobile money accounts. It’s a way of sending money globally or locally that can cut out unnecessary middlemen, achieve lower costs, and deliver at faster speeds.

It’s cash, sent through Bitcoin, delivered as local currency.

![](https://www.datocms-assets.com/99305/1702407736-learn-what-is-send-globally-state-title.png)

To understand how it works, let’s take a look at Bitcoin.

[Bitcoin](https://strike.me/learn/what-is-bitcoin) is a digital asset that trades 24/7/365, uninterrupted. People worldwide buy and sell bitcoin across all major currencies. This means you can buy bitcoin with your local currency, send the bitcoin to someone else, who can then sell that bitcoin for a different currency. Cash to bitcoin to cash.

On top of Bitcoin is the Lightning Network, a second-layer scaling solution that lets people securely send real bitcoin faster and cheaper. With Lightning, people can now send and receive bitcoin, anywhere in the world at lightspeed, for low-to-no cost. 

With Bitcoin and Lightning, all you need are cash on/off ramps to make global cash transfers… which is where Strike comes in.

The [Strike app](https://strike.me/download) has full functionality for Bitcoin, Lightning, and cash. Strike has also built a global network of partnerships with bitcoin-powered companies. These global partners can receive bitcoin, convert it to their local currency, and deposit it directly to bank or mobile money accounts. 

So, how does it work?

With cash in your Strike account, you add your recipient’s bank or mobile account details, enter an amount to send, and hit “Confirm”. Immediately, your cash is converted to bitcoin, bitcoin is sent via Lightning to the global partner, the global partner sells the bitcoin for local currency, and the local currency is deposited into your recipient’s account.

The entire operation is automated, and can be done in seconds. Neither you, nor your recipient, ever owns bitcoin. It’s a cash to foreign currency transaction, made possible through Bitcoin.

![](https://www.datocms-assets.com/99305/1702580906-using-bitcoin-to-send-money-abroad-02.png)

## Bitcoin as public payments infrastructure
This is a new approach to using Bitcoin. 

It’s using Bitcoin, not as an asset, but as a network to transfer value. It’s Bitcoin as public payments infrastructure for the world – an alternative to traditional money transfers.

In traditional finance, sending money internationally to friends and family (aka remittances) is slow and expensive. The average cost to remit money globally is roughly [6.20%](https://remittanceprices.worldbank.org/sites/default/files/rpw_main_report_and_annex_q223.pdf) — as in you send $100 and $6.20 is lost to fees, exchange rates, and/or middlemen. 

There’s also delays. The money can take hours, days, or even weeks to arrive and be spendable. You’re also limited if you’re trying to send really small or really large amounts. It all depends on the country, currency, or companies involved.

But why is that?

Put simply, international banking processes.

To transfer local cash in a local bank to foreign cash in a foreign bank involves payment batching, net clearance schedules, chargeback risks, business hours, bank holidays, and of course fees for all middlemen involved. If the countries or currency-pairs are small or uncommon, then the rates, delivery times, and limitations are going to be worse. 

It’s an inefficient system, not designed for speed and savings.

![](https://www.datocms-assets.com/99305/1702580912-using-bitcoin-to-send-money-abroad-03.png)


## Lightning delivers real savings and real value
Send Globally is for saving time and money.

By using Bitcoin as the network to send value, Strike can deliver even better cross-currency exchange rates. That’s because the transfer is able to bypass a lot of the processes and middlemen that drive up costs. And since the money is sent through Lightning, it can arrive much faster than traditional money transfers.

Strike has already launched in a [number of countries](https://strike.me/faq/which-countries-are-available-for-send-globally/) (with more to come), each with super low minimums. All you need is your recipient’s bank or mobile account details, and then you can send to them in their local currency, typically in seconds. 

It’s as easy as texting.

You can also use it for travel. Airport money changers charge crazy high fees and bad rates, so why not use the cash in your Strike app while traveling abroad? On your next trip to the Philippines, just use your cash to pay people in pesos, by Sending Globally right to their mobile money account.

If your recipient doesn’t live in one of the supported countries, that’s okay. The Strike app is available in [countries worldwide](https://strike.me/faq/where-is-strike-available-wr), so you can send them cash or bitcoin instantly to their Strike account. Or they can use any other Lightning-enabled wallet app to receive payments. Bitcoin is interoperable, and is traded across all major currencies. It just works.

You can use Send Globally the Strike app today, or check out this [step-by-step walkthrough](https://strike.me/learn/how-to-use-send-globally) to learn more.

Happy sending.


Bitcoin's Lightning Network makes global money transfers faster and cheaper

Using Bitcoin to send money abroad

## Peer to peer electronic cash
“Is bitcoin money?” – super simple question, a bit tricky to answer.

The answer can depend on who you are, where you live, or even on your definition of “money.”

![](https://www.datocms-assets.com/99305/1702580882-is-bitcoin-money-01.png)

The basic fact is that Bitcoin was originally intended and currently functions as a peer-to-peer electronic cash. You can spend it, save it, and earn it, in the similar way that you do with other money. 

People worldwide use bitcoin on a daily basis to transact, either out of personal preference or out of necessity (often when their national currency is failing). There are Bitcoin communities where you can live exclusively with bitcoin, and the number of those communities keeps growing, thanks to increasing bitcoin recognition and better bitcoin services coming online. 

For these people, bitcoin is their money.

But maybe for some people that doesn’t quite get to the heart of the question. Even if bitcoin is money for some, is it money for all?

## Money is … a G.A.M.E.
First of all, what is money?

History has had a lot of different kinds of money: shells, beads, cattle, metal coins, paper notes, and now digits on screens. Whatever money is, it needs to serve three basic functions:

1. **Store of value:** it needs to hold value over time (or at least some of its value)
2. **Medium of exchange:** it needs to be relatively good for trading
3. **Unit of account:** it needs to be usable for measuring/comparing prices

For example, when you have $10 dollars, you are *storing value* in the form of dollars, which you can use to *exchange* for other things, which are *priced* at $10 or less. 

With those functions in mind, a definition of money can be anything that has become a “Generally Accepted Medium of Exchange” (G.A.M.E.). Money can be anything from paper, to coins, to cigarettes, to food, so long as it’s *generally* accepted.

That definition has some flaws. What if something is generally accepted in one city, but not another? What exactly does “generally” mean? 51% accepted? Accepted by who? … It’s not a perfect definition, but it’s good enough for now.

Of course, for something to be generally accepted, it has to first gain the trust and recognition of people. Gaining trust (or losing it) can take decades, or years, or it can happen all at once. Hyperinflating currencies can be generally accepted one week and then not accepted the next, replaced by a different G.A.M.E. (despite what the local government says).

So money is about “general acceptance.” Check.

![](https://www.datocms-assets.com/99305/1702580888-is-bitcoin-money-02.png)

## Geography matters
In Lyn Alden’s book “[Broken Money](https://www.lynalden.com/broken-money/)” (must-read btw), she points out how money is very country-specific.

For example, in India the rupee is money, but in Japan the yen is money. Trying to spend yen in India or rupees in Japan is hard, because they’re not generally accepted. That’s the case for pretty much all of the world’s roughly 180 different “monies” today. Most money is *universally* accepted within its national borders, but is rarely (if ever) accepted far beyond those borders. 

The further you travel, the less your money is money.

The exception to this rule is, of course, the US dollar (and maybe to a lesser extent the Euro), which are more widely accepted beyond their borders. For the other 99% of monies in the world, they’re pretty useless beyond their borders. Yet we can still agree that the South African rand or Malaysian ringgit are money… just not in most places.

Visit any major city around the world and you’ll probably find that the local currency is the “number one” accepted money, followed by the US dollar, Euro, or a neighboring country’s money as numbers two, three, and four. Aside from those, it’s a steep drop-off for the acceptance of any other nation’s currency as money. 

But then there’s bitcoin…

Despite only being around since 2009, you’ll find that people accept bitcoin in every major city worldwide. There are also people who will trade their local money for your bitcoin. Although bitcoin isn’t the “number one” money in any single country (yet), it’s probably in the top 5 or 6 in almost all countries. The same can’t be said for the Brazilian real, Swedish krona, or Indonesian rupiah (or any of the ~180 world monies).

Bitcoin’s in a unique spot. It’s not *generally* accepted in any country… but it’s more generally accepted worldwide than almost all other monies. A leader nowhere, top-tier everywhere.

![](https://www.datocms-assets.com/99305/1702580893-is-bitcoin-money-03.png)

## Money here, money there
Back to the question, is bitcoin money?

Is it generally accepted as a medium of exchange? 

A simple answer of “no” doesn’t really capture the fact that bitcoin has become more widely accepted than most other monies. Bitcoin’s trajectory has gone from non-existence prior to 2009 to being used by millions of people worldwide. It’s even become legal tender in some countries (shoutout to El Salvador as first mover).

Sure, your country might classify bitcoin as property, and tax transactions accordingly (like the USA)... but people are still using it as a medium of exchange. In free economies, people can use whatever money they want, regardless of what the official classification may be. 

Regardless of how you answer “is bitcoin money?”, the reality is that bitcoin works as peer-to-peer electronic cash. It can be sent, received, spent, earned, or saved. Bitcoin is more generally accepted than ever, and it keeps growing year after year.

Is bitcoin money? You decide.

Understand the nuance to get the full picture

Is bitcoin money?

## Bitcoin ETFs
First of all, what’s an ETF?

ETF stands for Exchange Traded Fund, which is a type of investment product that can be traded on stock exchanges. ETFs hold assets, such as stocks, bonds, or commodities, and then issue shares, which investors can buy to get investment exposure to those underlying assets. 

![](https://www.datocms-assets.com/99305/1705929799-learn-what-is-a-bitcoin-etf-state-hero.png)

The idea is that the shares of the ETF *track* the price of the underlying assets, which means that as the assets go up or down in price, the shares in the ETF go up or down in a similar way. For example, if you buy shares in a Gold ETF, your investment would go up or down alongside the price of gold. It's a way of getting investment exposure to gold, without having to buy physical gold coins yourself. 

For the service of operating the ETF, the company that manages it (aka ETF Provider) charges a fee, typically a percentage of the total value of the fund’s assets.

So what’s a Bitcoin ETF?

A Bitcoin ETF is simply an ETF that holds bitcoin. It holds no other underlying asset – no other crypto, coin, or token… just [bitcoin](https://strike.me/learn/what-is-bitcoin). 

When the price of bitcoin goes up or down, the share price of the Bitcoin ETF goes up or down too. It’s a way to get investment exposure to bitcoin, without actually buying and owning the bitcoin *directly*.

Bitcoin ETFs differ from direct ownership of bitcoin, most notably in that ETFs incur ongoing management fees and don’t let you send, withdraw, and control your bitcoin yourself. The [Strike app](https://strike.me/download) is a way to buy, sell, hold, send, and receive bitcoin, as well as withdraw it to your own custody, without incurring any management fees.

![](https://www.datocms-assets.com/99305/1705598787-engineering_06-blended-bitcoin-fee-estimations-default.png)

## How does a Bitcoin ETF work?
From a high-level perspective, all you really need to know is that you can buy shares of a Bitcoin ETF in a brokerage account, and then as bitcoin’s price goes up or down, so too does your investment. 

Under the hood, the operations of a Bitcoin ETF are a bit more technical and involve creating and redeeming shares. Before digging in, there are a few terms you might need to know:

* **Net Asset Value (NAV):** The value of the ETF’s holdings
* **Authorized Participants (AP’s):** Special designated partners (usually large financial institutions) that can participate in creating or redeeming shares of the ETF
* **Custodian:** The company that actually holds the bitcoin, which could be the ETF Provider itself or a 3rd party company

So how does a Bitcoin ETF work?

1. Bitcoin ETF shares each represent a certain portion of the fund’s underlying bitcoin holdings (for example, 1 bitcoin per 1,000 shares), and are traded on a stock exchange.
2. The share price rises and falls according to supply and demand.
3. When there’s increased demand, the ETF share price rises, leading to a *premium to NAV*, meaning the ETF shares are higher in price than the underlying bitcoin they represent.
4. This premium to NAV acts as a signal to the APs to create new ETF shares, which they do by delivering cash to the ETF Provider who buys bitcoin and deposits it to the fund’s custodian.
5. The NAV of the Bitcoin ETF is updated to reflect the fund’s newly acquired bitcoin and the APs receive newly created ETF shares.
6. The APs can then trade the shares in the open market, thereby collecting and closing any premium to NAV.

The reverse can also occur when there’s a *discount to NAV*, meaning the ETF shares are lower in price than the underlying bitcoin they represent. This leads APs to gather shares and return them to the ETF Provider, *redeeming* them in exchange for the cash value of the bitcoin they represent. The ETF Provider delivers the cash to the APs by selling the underlying bitcoin.

This whole system is designed so that the ETF tracks the market price of bitcoin. Whenever there’s a premium or discount to NAV, either due to trading of ETF shares or price fluctuations of the underlying bitcoin, the APs are able to bring the share price back in line with the value of the bitcoin they represent. This system also provides liquidity, as the APs are able to participate in trading of shares, even when regular investors may be reluctant or illiquid.

The above scenario describes cash-create type ETFs, where the APs create or redeem shares by exchanging cash with the ETF Provider, rather than bitcoin. Different Bitcoin ETFs around the world may operate with different creation/redemption processes, bitcoin-per-share ratios, management fee amounts or schedules, or settlement times for when the bitcoin or cash need to be exchanged. You can read about each ETF’s details on their website.

Overall, APs and ETF Providers work to keep deviations from NAV to a minimum, so that the share price tracks the price movements of bitcoin. A 5% move in bitcoin’s market price should result in a corresponding 5% price move in the Bitcoin ETF share price. 

![](https://www.datocms-assets.com/99305/1705011631-learn-how-to-buy-bitcoin-support.png)

## Should you buy into a Bitcoin ETF?
If you’re getting into bitcoin, the question arises: should you buy shares of a Bitcoin ETF or buy bitcoin directly?

Ultimately, it’s up to you. 

For some, the convenience and familiarity of buying within their brokerage account is a big plus. For others, they might be swayed by “unit bias” – feeling better about owning *whole* shares of an ETF rather than owning *fractions* of a bitcoin, despite the fact that shares themselves represent a fraction of a bitcoin. 

Before deciding what’s best for you, there are some factors to consider:

### Management fees:
Bitcoin ETFs incur management fees, typically as a percentage of the total value of the fund’s holdings, while direct ownership has no ongoing management fees. From a long-term perspective, fees add up and are compounding, which steadily erodes the value of your holdings.

### Control of funds:
Owning bitcoin directly gives you the freedom to move your assets where, when, and how you want, while ETF shares can only be held via a brokerage service and have limited or no ability to be transferred to an alternate brokerage or custodian.

### Trading access:
Bitcoin ETFs can only be traded during market hours on business days, whereas owning bitcoin directly affords you the ability to buy and sell, any time, any day. During periods of high volatility, ETF-holders have to wait until markets open to be able to trade, while direct bitcoin-holders are free to trade and transfer when they please.

### Counterparty risk:
Bitcoin ETFs require trust in certain 3rd parties: the ETF Provider and custodian must securely manage the bitcoin, the Authorized Participants must ensure liquidity and limit deviations from NAV, and your brokerage service must provide reliable trading and access to your holdings. With direct ownership, you can decide where your bitcoin is held and by who, including self-custodying where you are the holder and sole authority over your assets.

### Future opportunities:
As the Bitcoin ecosystem grows, new use cases may arise for bitcoin holders, including using bitcoin to collect routing fees within the [Lightning Network](https://strike.me/learn/what-is-the-lightning-network) or posting bitcoin as collateral into escrow accounts to borrow against. Although these use cases are nascent and come with their own set of risks and complexities, they’re simply unavailable if your holdings are locked inside an ETF.

When considering whether to buy shares of an ETF, it’s important to consider the tradeoffs compared to buying bitcoin directly. 

The [Strike app](https://strike.me/download) offers a way to get into Bitcoin that’s simple and secure. You can sign up and buy bitcoin in minutes using regular cash payment methods, with little as $0.01 or as much as you want. Strike Private (private@strike.me) also provides OTC-desk bitcoin buying and selling for large orders from individuals, businesses, or institutions. 

With Strike, you control how you trade, hold, transact, or withdraw your bitcoin – and never pay any ongoing “management fee”. 

*Please note: this content is for educational purposes only. Strike does not provide financial advice.*