On September 5, 2018, the Lightning Network launched hoping to give Bitcoin adoption another charge. Lightning Network collaborated with payment processing startup CoinGate which is adding 4,000 merchants to the off-chain system
CoinGate merchants can accept payments from the Lightning Network which include high-end watch brands like Chronoswiss, and Louis Chevrolet. CoinGate has also attracted online brands like the gaming store Mmoga.com, and Bitlaunch. CoinGate has also brought in brand commitments from tech services like Xtream-codes.com and bacloud.com.
Faster Blockchain Protocol
The Lightning Network was incepted by Joseph Poon and Thaddeus Dryja in a 2015 whitepaper. The idea is that the creation of another layer atop the bitcoin blockchain allows transactions to be sent between the digital ledgers. This means quicker transaction speeds and a reduced cost to the entire network.
The Lightning network operates by allowing two parties to deposit funds at a single bitcoin address called a channel. This allows the two parties to exchange funds an unlimited number of times by utilizing both blockchain networks.
Securing the Network
This network allows bitcoin to maintain its security by allowing all of the value to be transferred once the channel is closed. This makes it a perfect option for high volume businesses like bars, restaurants, and e-commerce website. There is outstanding speculation about whether the adoption of the Lightning Network will bolster the price of bitcoin.
It’s universally accepted that increased bitcoin adoption means a development in the price of the world’s largest cryptocurrency. Making it easier for both merchants and customers to utilize cryptocurrencies on a day today basis is seen as an important milestone in turning bitcoin from an underground payment source to a universally accepted currency.
The Road to Adoption
The network held only 3 bitcoin as recently as six months ago but now the Lightning Network is growing has reached a capacity of 100 bitcoin. In July 2018, CoinGate and the Lightning Network began a beta test by onboarding 100 stores worldwide, excluding the United States. Thus far there have been over 100 processed payments with no reported errors.
As cryptocurrencies become more accepted as a legitimate store of value, merchants are looking for a way to expose themselves to this funding pool. Lightning Network is hoping to bridge the gap between merchants and customers to grow the crypto ecosystem.