VIVEK: Bitcoin Lightning Payments has a long way to go in India

As an Indian Bitcoiner who recently returned home, I found myself repeatedly using UPI digital payments for day-to-day expenses.

UPI (Unified Payments Interface) is India’s real-time bank-to-bank payment system that has become ubiquitous for making payments by scanning QR codes or using phone numbers. Even street vendors and small shops are allowed to accept online payments.

Given the difficulty of getting cash and vendors having to keep card machines, UPI is often the only payment option.

And I have to admit; it’s incredibly fast, cheap and easy to pay merchants through UPI apps compared to fumbling with Bitcoin Lightning wallets, custodial or non-custodial. Money moves instantly for free and the process is familiar to all parties.

While I’m huge on censorship-resistant, private and decentralized money, Bitcoin and the convenience of UPI are hard to ignore. UPI processes over 14 billion monthly transactions across over 450 banks without fees.

By comparison, Lightning faces low liquidity, channel balancing headaches, and unpleasant user experiences (which continue to improve with custodial wallets with some compromises).

Of course, the privacy implications of an almost entirely digital system controlled by centralized third parties make me cringe and sound dystopian. But most Indians happily give up privacy for convenience now and then.

So even as a Bitcoiner, I don’t see most Indians ditching UPI to start using Bitcoin Lightning en masse for everyday payments anytime soon, apart from Bitcoin circular economies. The incentive must be there. And let’s be honest – Lightning is still confusing Bitcoiners, not to mention my uncle!

Perhaps in the future, privacy concerns or devaluation of the currency could drive Indians towards Bitcoin payments. But for now, UPI has too much momentum and network effect.