Elizabeth Stark.

Before Bitcoin

Elizabeth Stark came to Bitcoin from the campaign for an open internet. At Harvard Law School she founded the Harvard Free Culture group, part of a student movement for sharing culture and knowledge freely online, and worked for the university’s Berkman Center for Internet & Society. Introducing herself on a course website in 2008, soon after she graduated, she wrote that she was “a big fan of electronic music” and was starting a record label, “where we're (gasp) pressing vinyl!”⁠^[1][2][3]

She went on to teach about technology and the law at Yale and Stanford, where she started a programme called Ideas for a Better Internet, and she co-founded the Open Video Alliance, which campaigned for free expression in online video. She was one of the main organisers of the protests against SOPA, the Stop Online Piracy Act, a US bill that would have created a blacklist of websites that infringed copyright. It was, she said, “the worst bill about the Internet that I had ever read”. Millions of people protested online, and the bill was stopped. For Stark the lesson was that “traditional power structures are being turned on their head”.⁠^[2][4][5]

Lightning Labs

She first heard of Bitcoin in 2010, while co-teaching a course at Stanford, when a teaching assistant sent her an article about what she saw as “open-source money”. She wondered, she later said in a sworn statement, whether it would actually work, and soon she “went down the rabbit hole”. Bitcoin, she came to believe, was “the missing link” for an idea she had long had: an internet of money. She became a fellow at Coin Center, a policy group for digital currencies.⁠^[2]

By 2016 she had decided that if Bitcoin was going to be “used by the entire world, it couldn’t happen on blockchainBlockchainBitcoin's shared record of every payment since 2009, stored in blocks that each link to the one before — which is what makes it a chain.”, she told TechCrunch: every payment recorded there waits for a block, and blocks hold only so many. Her answer was the Lightning NetworkLightning NetworkA network built on Bitcoin for payments through channels, without recording every payment as its own blockchain transaction., set out by Joseph Poon and Thaddeus Dryja in a paper dated January 2016. The paper thanks Stark “for reviewing and corrections”, and Peter Todd for fixing an error in one of its scripts.⁠^[6][7]

In the Lightning Network, two people lock bitcoin in a payment channelPayment channelA shared pot of bitcoin between two parties on the blockchain, which they can pay each other from, off-chain, as often as they like., a shared pot recorded on the blockchain, and then pay each other as often as they like by updating the balance between them. A payment can hop across a chain of channels to reach anyone on the network, and the blockchain is needed only to settle up, or if someone cheats. As Stark put it to CNBC: “If bitcoin is like a decentralized savings account, Lightning is a decentralized checking account”.⁠^[7][8]

In 2016 she founded Lightning Labs with Olaoluwa Osuntokun, a computer scientist just out of the University of California, Santa Barbara. “He’s the genius behind our software,” she said. The company’s main product is lnd, the Lightning Network Daemon, one of the main programs people run to join the network. On 15 March 2018 it released lnd 0.4-beta, its first version for Bitcoin’s main network and real money, and asked users to “experiment with only small amounts”. Stark said its limits were there to stop people “putting their life savings in bitcoin on Lightning”. The same day the company announced that it had raised $2.5 million from investors including Jack Dorsey, the co-founder of Twitter and Square.⁠^{[2][6][9][10]}

As the network grew, so did the company. In February 2020 it raised $10 million in a round led by Craft Ventures and launched Lightning Loop, a paid service that moves a user’s money between their Lightning channels and the blockchain, so that they can keep sending and receiving. “I think this funding round is another confirmation that the Lightning Network is getting real,” Stark said. By 2022, the company said, most of the network’s more than 30,000 nodes relied on its software. There were setbacks too. In October and November 2022, two unusually large TaprootTaprootA 2021 upgrade that added Schnorr signatures and addresses starting bc1p, making complex payments cheaper and more private. transactions set off bugs that stopped lnd nodes from reading the newest blocks until they upgraded, the Bitcoin Optech newsletter reported.⁠^{[11][12][13][14]}

Taro, a lawsuit and Taproot Assets

On 5 April 2022 Lightning Labs announced Taro, a way to create other assets on Bitcoin and send them over Lightning, along with $70 million of new funding led by Valor Equity Partners. Taro was built on Taproot, the upgrade to Bitcoin’s rules that took effect in November 2021. Its main purpose was stablecoinsStablecoinA token designed to keep a steady value, usually one US dollar, which its issuer promises to buy back. It isn’t bitcoin, and it depends on that issuer.: tokens meant to hold a steady value, usually one US dollar each, which many people use where local currencies lose value fast. The company called Taro “an important step in bitcoinizing the dollar”, and Stark told TechCrunch: “If I were Visa, I’d be scared.”⁠^[15][16][2]

The name led to a lawsuit. In December 2022 Tari Labs, the company behind a blockchain protocol called Tari, sued Lightning Labs for trademark infringement in the federal court in San Francisco. Lightning Labs argued that the two served such different, specialised users that confusion was “virtually impossible”. Stark explained the name in a sworn statement: a developer friend suggested it over dinner, taro is a common food in Latin America, Southeast Asia and Africa, where Lightning was growing, and “I like taro chips”. On 13 March 2023 Judge William H. Orrick found that the similar names were “likely to confuse customers” and that Tari was “likely to succeed on the merits”. He barred Lightning Labs from publishing updates to Taro or launching its next stage.⁠^{[17][18][2][19]}

Three days later both sides agreed to turn his order into a preliminary injunction. In May Lightning Labs released its next version under a new name, Taproot AssetsTaproot AssetsA protocol from Lightning Labs for creating tokens, such as dollar stablecoins, on Bitcoin and sending them over the Lightning Network.; CoinDesk linked the change to the lawsuit. In August the two companies settled on confidential terms, and the judge dismissed the case with prejudice, which means it cannot be brought again.⁠^{[20][22][23][21]}

Taproot Assets went live on Bitcoin’s main network in October 2023, at first only on the blockchain itself, and could be sent over Lightning from July 2024. On 30 January 2025, on stage in El Salvador, Stark and Paolo Ardoino, the chief executive of Tether, announced that Tether would bring its dollar stablecoin, USDT, to Bitcoin and Lightning through Taproot Assets. “Millions of people will now be able to use the most open, secure blockchain to send dollars globally,” Stark said.⁠^{[24][25][26][27]}

Dollars on Bitcoin, and Lightning’s critics

Not everyone wants dollars on Bitcoin. After the Tether announcement Frank Corva, a Bitcoin Magazine writer, called USDT on Bitcoin and Lightning “a stain on the soul of Bitcoin”, which, he wrote, “was created to compete with the U.S. dollar, not to help buoy it”. He also found, in a small poll of his own, that most of the people he asked thought it was good for Bitcoin.⁠^[30]

Stark’s answer is that the dollars still travel on bitcoin. A dollar payment over Lightning is converted into bitcoin and back again on its way: “You’re literally doing a conversion from dollars to bitcoin back to dollars,” she told The Block in 2022. Nodes that handle only bitcoin can pass such payments on and earn fees for it, the company says. In 2024 she said she cared about “solving real problems for real people, as opposed to meme coins or gambling”. When Taproot Assets went live she put it in one line: “at the end of the day, it all comes back to bitcoin.”⁠^{[12][15][31][32]}

Taro’s design drew questions too. When it was announced, the developer Ruben Somsen pointed out on the Bitcoin developers’ mailing list that it followed RGB, an earlier protocol whose originators included Peter Todd: “The design clearly precedes (and seems to have inspired) Taro, so in my opinion this should be acknowledged.” Osuntokun replied that he had “no problems acknowledging them”.⁠^[28][29]

Lightning itself has critics. In October 2023 the developer Antoine Riard disclosed a new kind of attack that could be used to steal money from Lightning channels, then stepped back from Lightning work, saying the attack put Lightning “in a very perilous position”. Most Lightning developers, he later told Cointelegraph, were “working for VC-funded entities”, at the expense of users. Osuntokun, Lightning Labs’ chief technology officer, had replied that lnd’s defences were in place by April 2023, and that such an attack would have to be “executed perfectly, for hours if not days”.⁠^{[33][34][35][36][37]}