Coingate is introducing 4,000 new merchants to the Lightning Network, an off-chain network to help Bitcoin scale and reduce costs. What this means is that any of Coingate’s customers can now accept bitcoin payments. Coingate is a cryptocurrency payment gateway and its current merchant base includes Chronoswiss, Louis Chevrolet, Mmoga.com, Bitlaunch.
Coingate and the Lightning Network
Coingate first launched a pilot project in July to test the functionality of the Lightning Network on its platform with 100 merchants. They are among the first large online companies to trial the new scaling system and it seems to be working thus far. Coingate further offered to cover any funds lost during the initial test. The company claimed that it experienced zero difficulties in its eight-week trial.
In the expansion of the project, Coingate will include 4,000 European vendors. Merchants can keep the funds in bitcoin and Coingate will convert to euros or US dollars for customers who do not want to deal with the volatility. Shoppers have the option of paying via the Bitcoin mainnet or the Lightning Network. According to the Coingate blog –
“a huge community of developers is working behind the scenes on making it user-friendly and accessible to a wider audience. By implementing Lightning Network, CoinGate is dramatically reducing the technical barrier on the merchant’s side, essentially making it effortless, while users can enable or disable Lightning with a toggle of a switch.”
What is the Lightning Network?
The Lightning Network is the claimed solution to Bitcoin scalability issues, highlighted most prominently in the block size debate that led to the creation of Bitcoin Cash. Currently, Bitcoin transactions speeds are around 10 minutes minimum, far too slow to make regular purchases. And fees are still too high.
Lightning Network essentially resolves these issues, as payments are near instantaneous and cheap. It has been demonstrated many times that items such as coffee and beer can be purchased quickly and for near-zero fees. With bitcoins Lightning Network, the claim that Bitcoin is slow and expensive is now false.
The problem at the moment is that most applications are not user-friendly and are restricted mainly to niche users. However, adoption is quickly increasing and the Lightning Network is fully operational for those who wish to download a wallet. It does require depositing a payment into a channel first. Lightning Network nodes are increasing at an impressive pace, and it is in prime position to facilitate bitcoin adoption, once a critical mass is reached.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.