Convincing merchants to accept Bitcoin payments is an ongoing struggle. Slow transaction confirmation speeds and high fees are two major hindrances. CoinGate aims to change the narrative by extending Lightning Network capacities to merchants around the globe.
Commercializing Lightning Network Payments
Bitcoin is a cryptocurrency in dire need of scaling. For payments, a confirmation time of an hour – even a half hour – is unacceptable. Various payment processors offer zero-confirmation transaction support, although they are far from ideal solutions. With the Lightning Network, direct payment channels can be opened between different parties. It allows for faster and cheaper transactions. More importantly, it can turn Bitcoin into a global currency over time.
Bitcoin’s Lightning Network is widely considered to be a major step forward. So far, it has not been used in a large-scale commercial setting yet. Various texts have been conducted on a small scale. The underpinning technology is not fully optimized yet. Even so, CoinGate is extending the Lightning Network to merchants. According to a recent press release, the new form of processing Bitcoin payments is offered to over 4,000 businesses. All of these retailers already rely on CoinGate’s platform to process Bitcoin payments.
This is a major milestone for both Bitcoin and the Lightning Network. It is the first large-scale commercialized venture using this payment technology. The second-layer extension to Bitcoin has been piloted by CoinGate for some time now. A successful trial among 100 merchants allows the company to take things to the next level. Existing clients can access this new option without making any changes on their end.
Improving Bitcoin Spending
This rollout by CoinGate is the result of hard work by passionate Bitcoin developers. In its current stage, the Lightning Network is not consumer-friendly. Various teams of coders are changing that aspect by embedding the functionality in popular Bitcoin wallet software. Additionally, some companies offer convenient user interfaces to access all of this new technology. There is still work to be done, but the recent progress should not be overlooked.
Retailers can benefit from key advantages offered by the Lightning Network. Minimal fees, instant payment confirmations, and a higher transaction throughput are the main selling points. This can make it easier for consumers to complete purchases with Bitcoin over traditional payment methods. Furthermore, this layer removes the risk for chargebacks and fraud.
One unknown facet is whether or not it will increase overall Bitcoin spending. The Bitcoin network sees plenty of daily transactions. Most of them have little or nothing to do with ecommerce. CoinGate’s offering of the Lightning Network may play a key role in turning that situation around. Now that over 4,000 merchants support this technology, real-world data can be collected accordingly. Coingate is confident the system can sustain high transaction volumes. It is now up to Bitcoin enthusiasts to put the system through its proper paces.
What do you think of CoinGate rolling out Lightning Network for its Bitcoin payments? Will it help encourage more day to day adoption of Bitcoin?
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