Bitcoin as a Medium of Exchange

Why Lightning Network Unlocks the Real Power of Bitcoin

“Gold was great as a store of value, but try buying a coffee with a gold coin.”

In the previous article, we explored how Bitcoin works as a store of value—a digital safe haven from inflation and central bank manipulation.

But money has another job:
It must also be a medium of exchange—something we can actually spend.

For Bitcoin to become truly global money, it must do more than protect wealth.
It must move wealth—instantly, cheaply, and reliably.

This is where the Lightning Network comes in.

🛑 The Limitations of Bitcoin’s Base Layer

Let’s be honest: Bitcoin on-chain (base layer) is slow and expensive for small payments.

• Average confirmation time: 10 minutes
• Fee per transaction: RM5–50 depending on congestion
• Block size: around 1MB, which limits throughput

Great for security and settlement.
Terrible for buying coffee, paying freelancers, or streaming money.

These constraints are by design—they keep the network decentralized and secure. But they also mean Bitcoin alone can’t handle the billions of daily transactions required for global usage.

⚡ Enter Lightning Network: Bitcoin’s Payment Layer

The Lightning Network (LN) is a second-layer protocol built on top of Bitcoin.

It lets users send instant, low-cost Bitcoin payments without putting every transaction on-chain.

Here’s how it works in simple terms:

1. Open a Channel: You and someone else lock BTC into a smart contract.
2. Transact Off-Chain: You can now send unlimited payments between each other instantly.
3. Close Channel: Final balances are recorded on the Bitcoin blockchain.

These channels can route payments across the network—so even if you’re not directly connected, LN will find a path.

🧪 Real-World Benefits of Lightning

Lightning turns Bitcoin into actual usable money.

You can tip RM0.05, send RM1.80, or buy coffee without waiting 10 minutes or paying RM20 in fees.

💡 Use Cases Growing Worldwide

• 🌍 Cross-border remittances: Send BTC over Lightning from Malaysia to the Philippines or Ghana instantly.
• 🧑‍🎨 Freelancer payments: Pay overseas talent in seconds with no bank fees or middlemen.
• 🎙 Podcasting 2.0: Listeners stream sats (small BTC units) to content creators in real-time.
• 🛒 eCommerce: Accept global payments without Stripe/PayPal or foreign currency conversion.

In short: Lightning unlocks Bitcoin for the real economy.

🇲🇾 Why This Matters in Malaysia

Malaysia is still very cash and QR-code driven, but the future is coming fast:

• DuitNow QR is controlled by banks and subject to fees, delays, and surveillance.
• Lightning payments are instant, uncensorable, and borderless.
• Ringgit devaluation makes Bitcoin-denominated commerce attractive.

For creators, merchants, and developers—Lightning is a way to operate globally from day one, with zero reliance on banks or payment processors.

🧘 Spending ≠ Selling

A common myth: “If I spend Bitcoin, I lose my position.”

Reality: You’re not spending Bitcoin, you’re using Bitcoin.

You can:

• Earn BTC via Lightning
• Spend BTC via Lightning
• Save BTC on-chain for long-term holding

Just like you might:

• Save in EPF
• Spend from e-wallet
• Earn via payroll

The magic of Lightning is that you no longer need to convert BTC back to fiat for it to be useful.
BTC can now live as a circular economy.

🏗️ How to Get Started with Lightning (Malaysia Edition)

1. Try a wallet

• Custodial: Wallet of Satoshi
• Non-custodial: Phoenix Wallet
• Experimental/self-hosted: Breez, Zeus

2. Receive Lightning payments

• Freelance gigs
• Offer Lightning paywall for digital content (e.g. PDF, article, podcast)
• Use LNbits or BTCPay Server if running your own store

3. Spend via Lightning

• Try platforms like Bitrefill (gift cards) or Bolt.fun (Lightning games)
• Support LN-friendly creators
• Subscribe to services that accept sats

4. Experiment & Learn

• Send test payments to yourself
• Read about channel management and liquidity
• Build something simple with a Lightning API (like Nostr tips or content paywalls)

🛤️ Next: How Lightning Works Behind the Scenes

In the next post, we’ll look deeper under the hood of Lightning:

• What are payment channels really?
• What is inbound vs outbound liquidity?
• Why payments sometimes fail?
• How routing and HTLCs power the entire system?

You’ll learn why Lightning is both simple and deep—and how understanding it gives you an edge as a builder, merchant, or Lightning Service Provider.

kheAI is a minimalist Bitcoin-native startup from Malaysia.
We help creators and merchants integrate Lightning, educate through stories, and hold Bitcoin as our native treasury asset.
Learn more at kheai.com