An Argentine Entrepreneur Tries to Take His Tipping App Global With the Lightning Network

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Damian Catanzaro, a 26-year-old Argentine programmer, created a sensation amongst Argentinian content material creators and NGOs with Cafecito, a tipping platform he began in Feb. 2020 that’s reached 300,000 customers.

But now he desires to go international after not too long ago integrating the Lightning Network, a Layer 2 cost product constructed on high of the Bitcoin blockchain.

Catanzaro developed Cafecito – the title is a Spanish phrase that refers to a small cup of espresso – when he was on the lookout for methods to monetize the instructional programming content material he was publishing in his social networks, particularly Twitter.

“I found that there were a lot of crowdfunding platforms from abroad, like Patreon. There was one in particular that focused on buying cafecitos named Buy Me a Coffee. The model was good, but there was nothing for Argentina,” Catanzaro recalled, provided that the Y Combinator-backed Buy Me a Coffee was based mostly in San Francisco.

Due to its lack of U.S. greenback reserves, Argentina makes it tough to use platforms that should be funded with foreign currency.

Within per week, Catanzaro developed an preliminary model of Cafecito, which solely contained his profile and was linked to MercadoPago, the funds processor of e-commerce large MercadoLibre, permitting individuals to ship Argentinian pesos to the programmer. Its enterprise mannequin consists of charging 5% of the tip given to the creator, whereas the cost processor, MercadoPago, retains one other share of the whole acquired, Catanzaro mentioned.

“After launching the product, a lot of people started talking to me telling me they wanted to have a profile on Cafecito, and that’s when I became interested in the idea to see how it would turn out,” mentioned Catanzaro, who left his different jobs as a programmer to dedicate himself full-time to the fast-growing challenge.

On May 29, 2020, Catanzaro launched the first model of Cafecito for the public. “From that day on, the platform started to grow a lot, every day,” he mentioned. Since January of this 12 months, it has recorded month-to-month development of 30% and at present has 300,000 customers.

However, a brand new world opened up for Catanzaro final week when he built-in the Lightning Network into the platform by enabling a worldwide marketplace for his platform.

Cataranzo first got here up with the thought in 2020, however didn’t implement it till this month. The first time he got here to Lightning Network, he found “a huge, gigantic world already developed with payments.”

Catanzaro determined to use the Open Node platform to combine the Lightning Network, which he did himself.  “I already made the first demo and next week I will open a beta for 1,000 users,” he mentioned.

“The whole crypto ecosystem, most of all the bitcoin ecosystem, thanked me, and a lot of non-crypto entrepreneurs also told me that the development was really cool. It’s something that didn’t exist. The response was super positive,” he mentioned.

According to Catanzaro, none of his potential tipping rivals from overseas have built-in crypto cost choices. And whereas Twitter not too long ago launched a characteristic the place customers can simply tip one another in bitcoin through the Strike cost community, Strike is only available proper now to individuals in the U.S. and El Salvador.

“It’s a long way to go before it’s a worldwide thing,” Catanzaro mentioned of tipping in crypto on Twitter.

Nevertheless, when Catanzaro first heard information of Twitter’s tipping characteristic, he thought Cafecito might be introduced on board with that initiative. “In fact, I sent an email to several people at Twitter to see if they would be interested in collaborating and integrating Cafecito as another option. I have not received any response yet,” he mentioned.

Next steps

So far, the programmer has not spent a greenback of promoting on Cafecito. “It was like a snowball. When someone joins, they share it on social networks and it is seen by someone who is interested in the project. And they end up coming to the platform organically,” he mentioned.

Catanzaro plans to increase Cafecito’s mannequin all through Latin America throughout 2022 so that individuals in the area can use the platform to tip creators with native technique of cost moderately than U.S. {dollars}.

“There is a lot of paperwork and bureaucracy to open companies elsewhere, but next year everything will be ready for expansion,” mentioned Catanzaro, who recognized Mexico as the first nation outdoors Argentina the place Cafecito will launch.

Before he built-in Cafecito with the Lightning Network, Catanzaro was planning for Cafecito to be a regional participant. “But bitcoin is going to be global,” he mentioned, including that now he intends to translate the platform into English, though the title, Cafecito, will stay the identical.

In the future, Catanzaro plans to make Cafecito a social community, the place individuals cannot solely depart a tip but in addition comply with customers and remark or like posts on partitions.

Given the platform’s development, many enterprise capitalists have approached Catanzaro, however he has declined gives, arguing that the platform generates sufficient funds to continue to grow through bootstrapping.

“I don’t need a big capital injection. I could take it, but I’m not interested,” he mentioned. “I like to follow this path. I think it’s the right one.”