On Bitcoin’s 11th birthday, OpenNode turns 1Reading Time: 5 minutes
Eleven years ago today, Satoshi Nakamoto published a proposal for the Bitcoin software protocol. One year ago, on Bitcoin’s 10th anniversary, OpenNode publicly launched so that we can always remind ourselves that our company is based around the foundational values of the white paper. We intend to stay true to the cypherpunk traditions that bore Bitcoin and carry on the ethos of Bitcoin into the Lightning Network. Our mission is to spread Bitcoin adoption to the world by providing powerful tools to merchants and developers in order to make monetizing businesses with Bitcoin easy.
We ❤️ the Bitcoin community
We started our journey with a focus on Lightning Network, but soon realized that there was a vital need for a reliable and simple on-chain bitcoin payment processor. Some of our earliest users were former BitPay and Coinbase Commerce users, and we’re glad to see that the fruits of our realization are serving the broader market.
Before we reflect on the year that’s passed, we’d like to offer our sincerest thanks to the many amazing people in Bitcoin. To all the developers, designers, and miners building on the base layer and the Lightning Network protocol, your tireless work and dedication to Bitcoin motivates us to build products that capitalize on the most secure transactional infrastructure the world has ever seen. The teams at Lightning Labs, Blockstream, and ACINQ building the trio of Lightning Network implementations deserve a special acknowledgment for dreaming up the specification and then committing the thousands of programming hours required to build. Thank you all!
KYC: what you didn’t know about the elephant in the room
We would have preferred to build a non-custodial solution for Lightning Network payment processing, but the user experience last year simply was not user friendly. The UX for Lightning Network and Bitcoin in general continues to improve, but we had to choose a custodial solution to simplify it.
Implementing know-your-customer requirements was not an easy decision, but it was necessary and with precedent. Amazing Bitcoin services like CashApp have KYC requirements as well because they serve Americans, have extensive banking relationships, and have to stay compliant with and adhere to US Treasury department regulations. In order for OpenNode to provide Bitcoin payment processing to enterprise, we must KYC our merchants to ensure we aren’t violating any national sanctions as a United States based company. We don’t, however, mandate our merchants to KYC their customers. They can decide not to collect any personal data from their customers if they wish.
We had some important early milestones after our public beta release. Coin Center, the leading non-profit focused on government policy towards the cryptocurrency industry, began taking donations via OpenNode late last year. This was our first big win, a sign that the industry’s stalwarts were ready to rely on our secure platform and technology to process Bitcoin payments.
Our Bitcoin-only vision pays off
Soon thereafter, we secured $1.25 million from Draper Associates to start bringing our vision to reality. Tim Draper, the head of Draper Associates, was one of the few VCs who fully understood our Bitcoin-only vision. Draper’s fund focuses heavily on Bitcoin projects, and it’s one of the reasons we chose to work with him over anyone else. Where Draper understood our Bitcoin-only narrative, others did not.
At the end of 2018, the infamous Roger Ver offered us $1.25 million to add the failing altcoin Bitcoin-Cash to our platform. We refused of course, because our security-first focus mandates reliable infrastructure. We’re a Bitcoin-only company because Bitcoin is the most secure way to transact on the internet by a wide margin.
Thanks for the $1.25MM offer @rogerkver, but we’re going to have to turn it down. Our vision of a better, more open financial system is only possible with Bitcoin. #bitcoin4everydayhttps://t.co/4tbavwnXXb— OpenNode (@OpenNodeCo) December 30, 2018
In August, we integrated with Shopify, the world’s leading e-commerce hosting provider. This integration brought Bitcoin and Lightning Network capabilities to Shopify’s network of 1,000,000 (and counting) business owners and entrepreneurs. We’re excited for the growth and savings that Bitcoin can bring to Shopify users world wide.
Momentum. Growth. Security.
OpenNode gained momentum in early 2019 despite Bitcoin’s bear market. We expanded our team to 11 people, moved to a new office on Museum Row in Los Angeles, and started a blog to bolster our educational offerings to the business community.
We saw game developers use OpenNode’s powerful API to build in-game purchases and dream up new business models with micropayments.
We processed transactions from one satoshi to 50 BTC, proving not only that people are transacting in bitcoin, but that they are willing to make large purchases with it as well.
Processing half-million dollar transactions is the exact reason we do not associate with the, “move fast and break things” culture associated with Silicon Valley and other tech companies. When it comes to processing payments, we believe that a conservative, security-first approach is critical to building trust in Bitcoin.
Our year in numbers
We’re noticing some interesting and exciting trends amongst our users. Here are some of the highlights:
- We are processing thousands of transactions per month. Since beta, we have averaged 6,225 transactions/month
- Our users are actually holding more Bitcoin than US dollars in their OpenNode wallets. Less than 10% of our merchants are converting to their native currency.
- The average amount of time bitcoin stays on our platform is seven days which reduces our custodial footprint.
- 96% of the transactions we process on our platform are via the Lightning Network.
Over the next year, we have a few very important goals at OpenNode. We’ll continue to seek sustained growth in both volume and transactions. Security remains our primary priority as we plan to process micro-transactions, mega-transactions and everything in between. We’re in the middle of a capital raise and will be using funds to expand our hiring and operations, add top developer and design talent, and ramp up our branding, sales, and marketing efforts.
A lot has happened over the last year but we’ve only just begun. We have a long way to go toward achieving our goal of creating circular global economies powered by Bitcoin, but every step we take brings us one step closer. Thank you for your support thus far, and happy earning!