[the protocol that makes Bitcoin the internet's currency for artificial intelligence (AI)

The L402 protocol represents a major technological breakthrough aimed at integrating Bitcoin into the heart of the Internet economy. By adopting this protocol, Lightning Labs opens up a realm of possibilities for online transactions, enabling instant and nearly invisible payments for the user. Discover how the L402 protocol aims to make Bitcoin the global currency of the Internet, facilitating a new era of decentralized and universal micropayments.

Can the L402 Protocol Make Bitcoin the Currency of the Internet?

The L402 protocol, previously called LSAT, is a protocol launched by Lightning Labs, the company behind the Lightning Network, designed to make Bitcoin the easiest currency to use on the Internet..

Specifically, this protocol allows web applications to charge for each API request using Bitcoin over the Lightning Network, the second layer of infrastructure dedicated to instant transfers.

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This protocol received a lot of attention in July 2023, when Olaoluwa Osuntokun, CTO at Lightning Labs, had shared a video showing an artificial intelligence (AI) model similar to ChatGPT charging 30 satoshi for each of its requests, the smallest fraction of Bitcoin. That amounted to less than 1 cent on the dollar at the time of recording.

Above all, this innovation makes it possible to charge micropayments for every request almost instantly.allowing users to pay only for the service they need instead of making a monthly or annual subscription.

Establishing such a payment standard through traditional channels would be impracticaldue to the time it takes to confirm bank card transactions and the high fees banks charge on each payment, which can sometimes exceed 2% of the total amount.

Using the L402 protocol, applications can take advantage of the properties inherent to the Bitcoin blockchain and the Lightning Network:

  • Digital : a completely immaterial exchange network accessible to all.
  • Decentralized : a structure that allows secure exchanges without the risk of censorship.
  • Worldwide : a border removal that allows every person in the world to freely use tools.
  • Low energy consumption : less energy-intensive infrastructure, adapted to the needs of higher consumption.
  • Quickly : transactions confirmed in a fraction of a second.
  • Accessible : an optimal user experience, facilitating payments through a browser or mobile extension.

In brief, the L402 protocol could make Bitcoin one of the most important currencies on the Internetthat lives, evolves and is used online.

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The L402 protocol represents a major innovation in the field of micropayments relying mainly on the Lightning network as well as macarons.

Macaroons, or “macaroons” in English, are an advanced version of website cookies. Unlike traditional cookies, macarons benefit from a more secure and flexible user authentication mechanism.

Tokens can be cryptographically validated by the issuer or an authorized entitywhich allows applications to authenticate users without having to access a central database. Users can tone down macarons with their own restrictionsthereby allowing secure assignment of permissions.

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Each L402 API key authentication is associated with a Lightning Network invoice and only becomes valid after payment is confirmedthus ensuring that every API request is paid in satoshis.

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What is an API?

An API is a kind of gateway that allows different applications to communicate. In the case of the L402 protocol, the APIs allow the application used to communicate the invoice to the Lightning wallet.

The implementation of the L402 protocol described earlier is called “Aperture”. It uses the buttons to ensure that only those who have paid can access online services.

In summary, when using an application that incorporates the L402 protocol, the process is as follows:

  • First of all, the app delivers a macaronwhich acts as a digital ticket as well as a Lightning invoice for payment in satoshis.
  • Once the payment is confirmed, the button is activated thanks to receipt of payment received;
  • After all, Aperture verifies that the payment has been made and that the token gives the correct rights before allowing the query to access the application. This ensures that access to the app is paid and secure, without requiring a central system to verify each user and each payment.

One of the weak points of the protocol lies in the process of recalling buttons which, in some cases, can recall multiple buttons at the same time.. One solution being considered to solve this issue is to include unique user IDs in badges, allowing for more flexible access management.

Summarizing, The L402 protocol is a powerful solution for developing monetized APIs, particularly in a machine-to-machine economyproviding an efficient authentication and payment mechanism.

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What future could the L402 protocol hold for Bitcoin?

The L402 protocol is still in its early stages, but its capabilities are already promising. As evidenced by Olaoluwa Osuntokun's post, this protocol could pave the way for trading between artificial intelligences.

We could envision a scenario where different AI models specializing in different domains can work together. For example, one template will be dedicated to code generation, another to user interface (UI) design, and a final one to search engine optimization (SEO). This will allow users who want to build their site to pay a single Lightning invoice to an AI that will oversee the build and pay the others itself.

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The Lightning Network, which has already proven its reliability and efficiency over the years, has become a key infrastructure for microtransactions. This can already be seen on the social network Nostr, where users make small satoshi transfers to support their favorite content creators.

Bitcoin Lightning Network 1

Thanks to the L402 protocol, the Lightning Network could expand its use to other areassuch as buying high-quality content such as press articles, videos or podcasts, obtaining VPN services for a short period of time, renting data analysis tools or paying contributors to open source projects.

After all, combining the L402 protocol with the Taproot Assets protocolalso developed by Lightning Labs, it would be possible to establish a similar payment standard using stablecoins it is linked to fiat currencies such as the euro or the dollar, thus opening up these applications to users outside the Bitcoin ecosystem.

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Source: Lightning Labs

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