100 Traders Can Now Try Bitcoin’s Lightning Network Risk-Free
A few lucky merchants now have one less hurdle to accepting bitcoin payments through the Lightning Network.
Revealed exclusively to CoinDesk, payment processing startup CoinGate is opening a pilot program that will allow 100 merchants to try a Lightning-enabled version of its service, a version that leverages open source technology meant to make bitcoin transactions fast and cheap.
As with CoinGate’s standard service, the company will handle the finer details of the crypto-fiat exchange, however, the new pilot has the benefit of covering costs in the event of a loss of funds due to the early nature of the exchange. software (flash implementations are now largely in beta).
And while most pundits believe the network is still not ready to support major business transactions, CoinGate CTO Rytis Bieliauskas believes there is a greater good to be done by being among the first to test the waters.
He told CoinDesk:
“It’s brand new technology. Inevitably there will be bugs, either in our implementation or in the Lightning Network. This will help, not just us, but the whole community, as the bugs we find could help the entire protocol. “
Although Lightning invoices are generally limited by the protocol itself to 0.042 bitcoin each, or less than $ 300 at current prices, CoinGate CCO Vilius Semenas told CoinDesk that there is no set limit on how many bills CoinGate will reimburse in the event of a loss of funds.
At least for now, few buyers have the resources to send cryptocurrency from a Lightning wallet like Zap. But this pilot could test whether Lightning is actually addressing some of the issues that deter traditional merchants from prioritizing crypto payments in the first place.
For example, Bitcoin’s latency presents an issue for CoinGate customers like Luxembourg-based adult content platform LiveJasmin.
“Instant payments are the most important from our perspective,” said Tamás Szerencse, Payments Manager at LiveJasmin, explaining why the company joined CoinGate’s Lightning pilot.
With up to 40 million daily visitors, LiveJasmin could become one of the biggest traditional merchants to experience Lightning yet. Experimenting with more diverse types of transactions could provide valuable insight into how Lightning works in nature.
Learn from experiences
As such, CoinGate is emerging as one of the small but growing crypto payment processors to take the plunge. (Last week GloBee Crypto Hardware Wallet Accessories Provider Helped CryptoCapes accept their first payment.)
Still, most recognize that there is still a long way to go before traditional merchants can safely use Lightning.
Steve Beauregard, the founder of the payment processor GoCoin, told CoinDesk that he agreed with Bieliauskas that layered networks might be able to reduce friction for recurring payments, but he acknowledged that the technology is still in its infancy, which is likely to limit buyers.
“It’s still very complicated for an average end user to use it [Lightning], said Beauregard. “I think those who would benefit the most would be the international traders who are trying to accept payments from overseas.”
The majority of traders who applied for this pilot project were from companies like the collectibles maker Bitgild, which offers silver and gold coins engraved with QR codes for real cryptocurrency, reaching out to customers already fascinated by Lightning experiences.
Beyond cross-border payments, Bieliauskas argued that Lightning-enabled transactions may soon be a cheaper option than credit cards for merchants processing micropayments or payments worth a fraction of a dime. .
For now, Beauregard has stated that the main value offered by these Lightning pilots is an opportunity to participate in experimental research.
On this topic, famous Lightning developer Alex Bosworth agreed that this pilot will provide a learning opportunity for the entire network. The most useful features of Lightning for merchants are still in development.
Bosworth told CoinDesk:
“Going forward, a good thing about Lightning merchants is that if they charge you in one currency and the payer wants to pay in a different currency, it will be possible.”
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