Founding Members: Jesse Shrader and Anthony Potdevin

Established: March 2021

Main Office: Nashville, TN

Employee Count: 10

Website: https://amboss.tech/

Publicly Traded or Privately Owned? Privately Owned

Jesse Shrader predicts a significant year for the Lightning Network.

As Bitcoin’s value increases and Tether (USDT) integrates into Lightning, Shrader believes more businesses and institutions will adopt Lightning for transactions in the forthcoming year.

His company, Amboss, is ready to facilitate this transition.

“We aim to expand Bitcoin as a payment method and utilize Lightning to accomplish this,” Shrader shared with Bitcoin Magazine. “Our goal is to optimize Lightning into a high-efficiency, high-performance system.

With a plethora of tools and services developed by Shrader and his team at Amboss, they are prepared to welcome the upcoming wave of institutional users to the world’s premier permissionless payment network, especially now that USDT operates on Lightning.

The Role of Amboss

Amboss mainly offers smart payment infrastructure for digital payments using the Lightning Network.

“We provide insights on how to enhance payment efficiency on the network,” Shrader stated.

To achieve this, they have a range of products and services.

One of the most prominent is Amboss Space, a Lightning Network explorer that employs machine learning to help users access information or connect to any node on the network.

In addition to their analytics software, Amboss offers its clients tools and services to help enhance liquidity conditions on Lightning.

One such service is Magma Marketplace, which enables users to trade liquidity on the Lightning Network. Magma allows users to offer liquidity — without relinquishing control of their Bitcoin — for a yield.

Another is Hydro, an extension of Magma. The software allows users to automate their liquidity purchases to enhance payment success.

(Amboss also provides Reflex, a compliance suite for business customers with Anti-Money Laundering (AML) reporting obligations.)

Amboss’ analytics software and tools are designed for high-volume transactions, which are becoming easier to process on Lightning.

“We simulate businesses’ payment abilities,” Shrader explained. “We assist businesses in understanding their network reach when initiating a payment.”

Lightning’s Current Status

Shrader holds a positive outlook on Lightning’s growth. Users are increasingly depending on the network to send more than just micropayments.

“We’ve successfully processed everyday payments on Lightning, which I’m defining as transactions between $10 and $4,000,” said Shrader. “We strive to further enhance the network’s capabilities, with a focus on decentralization.”

Processing payments larger than $4,000 is still challenging. Shrader explained that more capital is necessary to facilitate larger payments.

However, he noted that the recent surge in Bitcoin’s price has simplified the processing of larger payments.

“The recent increase in Bitcoin’s price has expanded the settlement capacity across all Lightning channels,” Shrader said. “Since the channels are denominated in Bitcoin, it’s akin to having larger pipes.”

While Shrader is hopeful about these larger pipes enabling more throughput, he also believes that Tether (USDT)’s integration into Lightning will draw even more liquidity to the network.

Tether (USDT) And Lightning

At the end of last month, Lightning Labs announced the introduction of USDT to Bitcoin and the Lightning Network through the Taproot Assets protocol.

This upgrade simplifies the integration and acceptance of USDT for Bitcoin service providers, which Shrader believes will greatly benefit Lightning.

“It’s clear that Tether has market acceptance,” said Shrader.

“Last year, it processed $10 trillion in payments, surpassing Visa and MasterCard,” he added.

“It’s evident that there is a global demand for U.S. dollars.”

Shrader, a realist, acknowledged the concerns of staunch Bitcoiners regarding USDT operating on Bitcoin and Lightning, and he shares their appreciation for Bitcoin’s monetary stability.

Nevertheless, he believes the advantages of having USDT on Lightning far outweigh the disadvantages, as many still don’t comprehend Bitcoin or are unwilling to risk its volatility.

“Many are yet to grasp the benefits of Bitcoin,” he explained.

“I believe Bitcoin is an exceptional tool, and I want to make that accessible to as many people as possible. With the numerous issues with traditional payments, Bitcoin offers a highly secured, auditable system, which I aim to bring to the world on a large scale,” he added.

“While Bitcoin’s price fluctuation is beneficial for me, many fear volatility. If you have a low-volatility asset like USDT, now on very secure, trustless rails, that’s a huge advantage.”

The Issue That USDT On Lightning Resolves

Shrader recounted how the first Bitcoin-related conference hosted by MicroStrategy was actually titled “Lightning for Corporations.” During the conference, companies were encouraged to start paying employees in Bitcoin via Lightning — without fully understanding the issues this would cause at the time.

“Employers realized that submitting all the necessary 1099s to employees was cumbersome,” said Shrader. “They also had to deal with a lot of regulatory overhead.”

Shrader highlighted that paying employees in USDT over Lightning can reduce accounting and regulatory burdens, as well as some of the counterparty risk associated with using banks — a situation Shrader is all too familiar with.

“Our payroll was processed through Silicon Valley Bank,” said Shrader.

“At one point, the payroll provider asked me to resend my mid-month payroll after I had attempted to pay the staff. I lost half a month’s runway. This was due to Silicon Valley Bank’s insolvency,” he added.

“If I can mitigate the counterparty risk in the financial system by transitioning to Bitcoin and Lightning, then I’m in a much safer position.”

[Author’s note: Some counterparty risk still exists when using USDT, as you have to trust that Tether holds actual U.S. dollars to back the tokenized ones it issues.]

Potential Risks

Shrader acknowledged some of the risks associated with USDT on Bitcoin and Lightning, but didn’t seem overly concerned.

“There are some MEV risks when trading assets other than a blockchain’s native asset on-chain,” said Shrader. “But Bitcoin already has Ordinal inscriptions that create other assets, so that problem already exists.”

He was not perturbed when the risk of a Bitcoin fork was brought up, resulting in the USDT on one of the chains becoming worthless. Nor did he believe there’s a significant risk of larger economic nodes in the Bitcoin network, like Coinbase, which custodies the Bitcoin for the U.S. spot Bitcoin ETFs, opting to support a “Tether fork” of Bitcoin, which could also include other upgrades that could be detrimental to Bitcoin in the long run.

“The consensus on Bitcoin is not determined by Bitcoin custody, so while an important business like Coinbase may support various changes or initiatives, it doesn’t guarantee that protocol changes would be implemented,” Shrader stated.

Instead of focusing on the risks associated with USDT on Bitcoin, Shrader is doing the opposite.

“What’s more intriguing is probably the opportunities it unlocks where you have actual arbitrage ability on Bitcoin itself,” said Shrader.

“Since every node is capable of transacting in both USDT and Bitcoin and can exchange between them natively on Lightning, you can send Bitcoin out of one Lightning channel and receive USDT in another of your Lightning channels,” he added.

“This can be as simple as generating a USDT invoice and settling it with BTC, instantly rebalancing holdings.”

2025: The Year Of Lightning

In the closing thoughts from my interview with Shrader, he shared two final key reasons why 2025 will be a landmark year for Lightning.

The first is that owning Bitcoin is no longer a prerequisite to use Lightning.

“Until this year, individuals or businesses wanting to transition to Lightning needed to own Bitcoin first — and that’s a significant barrier,” Shrader explained. (Shrader added in response to a follow-up question that, outside the U.S., it’s relatively easy and common to access USDT.)

“The market for payment processing exclusively in Bitcoin is small. But this year we’ve removed that barrier, and consumers can pay with another asset — USDT. There’s already a large market for that,” he added.

(Shrader also noted that while USDT operates on Lightning rails, Bitcoin still benefits, as the USDT is converted into Bitcoin as it travels across Lightning. He added that “all that Bitcoin circulating on Lightning makes it more rewarding to operate a Lightning node.”)

Furthermore, Shrader noted that Lightning users will only pay a small fraction of what they were paying in transaction fees using the traditional financial system.

“We’re offering liquidity at less than 0.5%,” said Shrader.

“As a user of major payment card networks, I’m charged 4% for all payment processing, and the funds don’t arrive for days to weeks after the payment is initiated,” he added.

“With Lightning, your payment processing fees are reduced by almost 10 times.”

Considering Shrader’s points, it’s difficult to envision that 2025 won’t be a significant year for Lightning.