Better artificial intelligence apps with Bitcoin

Better artificial intelligence apps with Bitcoin

Exploring what Bitcoin, Lightning, and the Strike API means for AI-powered apps

Artificial intelligence is changing how business is done.

Large language models (LLMs) and machine learning (ML) technologies have led to an explosion of new AI-powered apps and services:

  • Content creation
  • Data analysis
  • Chatbots and virtual assistants
  • Education
  • Language translation
  • Text-to-image, text-to-audio, text-to-video

These services unlock huge creative potential for businesses and consumers alike.

Upfront costs, delayed settlement, missed opportunities

The business of AI faces unique challenges.

AI is computationally intensive, to a degree not matched by other software services. When customers use an AI-service, they require immediate computational resources – compute power, storage, hardware, and electricity. Every chat, image, analysis, or video that’s generated represents an immediate and significant cost to the business, presenting an obstacle to scalability.

To serve retail customers, AI-apps often turn to card payment processors as a primary revenue channel. Customers fill out a form with their credit/debit card number, name, and address, to be charged a subscription or one-time fee. Although their payment is quickly registered, final settlement of funds can take days to weeks.

What this means is variable costs are incurred upfront, while revenues are settled later.

This gap between costs incurred and revenue settlement time means that payments can fail or be reversed after services are delivered, exposing the business to added risk – fraud, chargebacks, and exchange rates. Added risk means added working capital requirements, added headcount, added overhead, and added costs.

Additionally, the card payment process imposes friction to the user experience:

  • Users have to enter personal information
  • Card processors charge high fees, which are ultimately borne by the user
  • Cross-border payments can take longer or incur bad fees or rates
  • Some foreign currencies might not be supported
  • Cards have minimum payment amounts, rendering micropayments impossible
  • Banks can block or reject payments altogether
  • The entire payment process can be time consuming

These friction points obstruct customers who are ready and willing to pay. They also structurally exclude or impede entire segments of customers, including those who prioritize personal privacy, are highly price-sensitive, lack access to compatible banking/card services, are unbanked, or who simply live in unsupported countries.

To achieve scalability, why can’t AI-apps serve customers globally and deliver one-time service for $0.10, friction-free?

Is it because the business or customer isn’t interested or because the payment infrastructure isn’t capable?

What’s needed is innovation in payments and settlement.

Bitcoin & Lightning offer AI solutions

Bitcoin and Lightning are ideally suited for AI-powered applications.

Bitcoin is peer-to-peer electronic cash. It’s secure, globally transferable, and readily convertible into any global currency. The Lightning Network is a second layer to Bitcoin, providing a way to transact real bitcoin, faster, cheaper, and more privately than on Bitcoin’s main blockchain.

Payments sent through the Lightning Network are:

  • Instantly settled: Payments move at lightspeed, with no chargebacks or delayed settlement.
  • Low-to-no cost: Routing fees can be as low as fractions of a penny.
  • Borderless: It’s just as easy to pay domestically as internationally.
  • Interoperable: Payments and can be sent and received with any Lightning-enabled app.
  • Scalable: Payments can be fractions of a penny to thousands of dollars.
  • Anonymous: Customers don’t fill out forms, recipients don’t collect sensitive personal information.

What this means is that businesses can now accept ultra-low cost global payments through a network that supports sub-penny amounts with zero chargeback risk. Since bitcoin is an asset that trades 24/7/365 across all major currencies, payments can be received instantly, then programmatically converted into any other money.

So what does this look like for AI-powered apps?

  1. A user arrives at an AI-powered website or app
  2. They input their AI prompt or request
  3. A Lightning invoice QR code is generated and presented to the user
  4. The user scans with any compatible Lightning wallet app and the payment is delivered instantly
  5. The AI task is processed and delivered to the user
  6. The AI app owns the bitcoin – unencumbered – which is readily transferable and convertible into any global currency

In this scenario, payments are not routed through the traditional payment rails of legacy card payment processors and banks, but through an alternate, permissionless network. The revenues are settled upfront, avoiding chargeback risks and the collection of the customer’s personally identifiable information.

It’s a new way to approach monetization, not just for AI-apps but for any online content or other services.

It’s payment first, services second – at scale.

The Strike API

The Strike API is built to serve this type of use case.

It’s designed so that developers and businesses can easily send and receive payments across Bitcoin, Lightning, and cash networks. It’s fully interoperable with bitcoin and cash, meaning you can send and receive payments through the Bitcoin blockchain or Lightning Network from either your bitcoin or cash balance, and the Strike API will automatically handle any asset conversions behind the scenes. This lets you operate with whichever money best suits your needs for tax or volatility reasons, while giving you the flexibility to cash-out to bank accounts or send funds to Bitcoin or Lightning wallets worldwide.

So what does this mean?

It means you can add an alternate, low-cost payment channel, while expanding your total addressable market to include more global, privacy-focused, and underbanked customers. Using the Strike API, you can easily generate and display Lightning invoice QR codes on-demand to receive immediately-settled payments from any Lightning-enabled wallet, as either bitcoin or cash.

It also opens the possibility of integrating your services into 3rd-party apps, since collecting revenue can be as easy as delivering your service. For example, you can serve customers via social media:

  1. The customer messages their request to your service’s social media account
  2. Your account auto-responds with a newly generated Lightning QR code
  3. The customer scans the code with their Lightning wallet, instantly sending their payment
  4. The request can be fulfilled

Bitcoin and Lightning mean businesses are no longer beholden to expensive, limited, and slow card payment processors.

Check out the Strike API and get started today.

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What is the Lightning Network?

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