In the next few years, the Lightning Network (LN) will be built into wireless routers and smartphone apps to seamlessly process off-chain bitcoin payments. Although the Lightning Network is still in beta release, it is already being put to real-world uses like buying a coffee at Brisbane airport. Gradually, the LN is moving away from buying stickers on the testnet to practical uses on the mainnet, and one recent development, ZigZag, gives users the ability to buy crypto with an appropriate wallet from your smartphone.
ZigZag crypto exchange with the Lightning Network
ZigZag was developed to allow fast, low-cost crypto exchange via the LN, and the development team recently took to Medium to announce their mainnet release. By default, the beta release of LN sets the maximum channel funding to a little over 0.1677 BTC, which is over $1,000 at today’s bitcoin price of $6,400. For now, ZigZag has set the maximum value of each transaction at $100.
One of the most popular LN-enabled wallets is the Eclair wallet from ACINQ for Android devices. Eclair has testnet and mainnet variants of their app available in the Google Play store. Once you have installed the mainnet version on your Android smartphone, you need to transfer funds to the Bitcoin address in the wallet. Once you have funded the wallet with bitcoin, copy the peer address for ZigZag and then, on the Lightning Channel tab in Eclair, select “PASTE A NODE URI.”
Decide the level of funding for the ZigZag channel, and you are now ready to exchange bitcoin for ETH, BCH, LTC or DASH. We chose to buy ETH during our test and had the crypto sent directly to the ETH address of our Wirex card.
Send ETH to your Wirex card with ZigZag
From ZigZag’s website select the amount of BTC you want to exchange for ETH (or BCH, LTC, and DASH), add your Bitcoin address (3aaaaaaaaaaaaaaaaaaaaaaaaa in our screenshot) and the ETH address shown in the Wirex app (0x3aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa in the screenshot), and click the EXCHANGE button.
This will then bring up a QR code that you can use in the Transaction History tab of the Eclair wallet. Scan the QR code, and the ETH will be sent directly to your Wirex card. Do remember that the initial on-chain funding of Lightning Network channels can take several hours, even longer if you want the lowest possible fees, but once the channels are funded, the transactions are at “lightning speed” with nominal costs. We recommend channels are funded now, in anticipation of Lightning Network nodes that are popping up across the globe.
History and future development of ZigZag
Crypto Disrupt contacted the ZigZag development team at Bitlum to ask what inspired them to use the Lightning Network for crypto exchange and what their plans are for the future.
Andrey Samokhvalov replied “As Bitlum, we want to solve problems in order to help more people use Lightning Network and to help the ecosystem grow. There are many ways to achieve this including building more products, like an easy to use wallet.”
He also added, “Building a company around a product, getting investors on board, running a business and at the same time maximizing our value for the community represents a challenging set of options we are reviewing now. We hope we will be remembered more for what we actually did, at the end of the day, rather than a specific product or name.”
Denis Khvostov provided details of their initial focus for ZigZag as:
- Pushing Bitcoin utility phase, where Bitcoin is used as money, not storage of value
- Pushing streaming money concept (see Andreas Antonopoulos youtube video)
- Increase adoption of Lightning Network
Over the next two to four months, Andrey’s plans for the product are to:
- Make ZigZag more reliable, fix bugs
- Make reverse exchange (i.e. from on-chain to off-chain)
- Release non-beta version of ZigZag
- Integrate with at least one Lightning Network wallet
- Build online wallet/application marketplace with a list of applications and rating system
- Create a Chrome extension (aka Metamask), so that users could pay with one click
- Integrate ZigZag into their own wallet
- Work out legal issues
- Get investment for building the wallet and continue development on ZigZag
Other Lightning Network news
Coingate recently announced that they are rolling out 4,000 Lightning Network nodes to merchants, and back in May, Vaultoro confirmed LN would also be used to purchase physical gold bars. The development in the next few years is expected to see the Lightning Network utilized throughout society, even though many users will not even know they are using it. Most internet users today don’t have any understanding of the network protocols they are using, but it doesn’t stop them from benefitting from what the internet has to offer. Likewise, the pioneering development work being carried out by Bitlum with their ZigZag offering will be something the wider general public soon take for granted in their day to day purchases.
Financial analyst, smartphone app designer, technical writer, and crypto enthusiast. Blockchain verified graduate of MOOC 9, DFIN-511: Introduction to Digital Currencies, run by the University of Nicosia.