Bitcoin-to-Gold Exchange Vaultoro Implements Lightning Network Payments

Francisco Memoria
  • Gold-to-Bitcoin exchange Vaultoro has recently revealed through a blog post it now allows users to deposit using Bitcoin's Lightning Network
  • The feature is still in Beta, and as such users can only deposit 100 Satoshis using it.
  • The company plans on allowing users to trade without depositing to the exchange.

Vaultoro, the world’s first crypto-to-gold exchange, has recently announced it implemented bitcoin’s Lightning Network as an instant deposit method. In the future, per the exchange’s CEO, users will be able to buy gold with bitcoin directly from their wallets.

To take advantage of Vaultoro’s Lightning Network (LN) payments integration, users will have to download the Eclair Wallet, deposit funds in it, open a Lightning channel, and once its fully loaded deposit funds to Vaultoro’s deposit address. Since the feature is still in Beta, Vaultoro only allows deposits up to 100 Satoshis using the Lightning Network.

Normally, users have to send their bitcoins to Vaultoro and wait for six network confirmations before they can start trading. During the waiting period, their bitcoins are exposed to counterparty risk. With the Lightning Network, the company’s CEO Joshya Scigala notes, users won’t need to trust Vaultoro’s hot wallet to trade.

According to a blog post, the exchange plans on allowing users to place orders directly from their wallets, thanks to the Lightning Network. The blog post reads:

“Vaultoro traders will be able to deposit funds in milliseconds without having to trust our exchange hot wallet if set to instant order. Our goal at Vaultoro has always been to make the exchange radically transparent and now with lightning network, market takers will have no need to trust our hot wallet.”

Vaultoro's blog post

Vaultoro notes that the Lightning Network payments feature is still in Beta, and warns users they’ll be using it at their own risk. The Eclair Wallet is now recommended, as it’s the only Android wallet supporting LN payments.

The company claims it was also the first exchange to support the user activated soft for (UASF) back in May 2017, in an attempt to “help unlock the upgrade stalemate” that divided the bitcoin community, and ultimately led to Bitcoin Cash’s creation.

Per its website, Vaultoro currently allows users to trade gold using bitcoin, down to a minimum of 0.001 grams of gold. The exchange fully transparent, and even lists on its website the amount of gold and bitcoin each user has, while maintaining anonymity.

The exchange’s users can hold gold for seconds or years, while knowing their ownership certificate is safely stored on the blockchain. Gold holdings are physically stored in Switzerland, and can either be requested or left in the vault, where they’re insured. Reportedly, Vaultoro is working on a gold-backed debit card.

Only 19% of Bitcoin’s Current Supply Is Actively Being Traded, Chainalysis Reports

Francisco Memoria

Blockchain analytics firm Chainalysis has published a report in which it says that only 3.5 million bitcoin, roughly 19% of the flagship cryptocurrency’s circulating supply, are actively being used for trading.

According to the report, around 20% of the bitcoins that have so far been mined are lost to dead addresses, has it has not moved for five years or more. Some of these addresses, however, belong to bitcoiners who simply have not moved their coins, as someone who mined BTC in 2009 and early 2010 recently signed messages calling out Craig Wright, proving he is both active and in control of the keys to those addresses.

The rest of the cryptocurrency’s circulating supply, around 60% of it, is being held as a long-term investment by cryptocurrency users that have not sold more than 25% of the BTC they have received.  It’s worth noting that there are only 2.4 million BTC left to be mined.

chainalysis.pngSource: Chainalysis

The blockchain analytics firm identified 340,000 weekly active bitcoin traders, and found that so-called retail traders – those who moved less than $10,000 to exchanges at a time – were responsible for 96% of the 3.5 million bitcoin actively being traded.

Most inflows to cryptocurrency exchanges per week since 2018 were in increments between $10 and $1,000, as around 625,000 transactions of this size were made per week. Around 125,000 transactions per week were moving in increments between $1,000 and $10,000.

Professional traders, including institutional investors and cryptocurrency whales, represent roughly 14,200 out of the 340,00 weekly active traders, but are responsible “ for 85% of all the USD value of Bitcoin value sent to exchanges.” Chainalysis added:

Because of this, professional traders are the most significant contributors to large market movements, such as those seen during Bitcoin’s dramatic price decline in March as the Covid-19 crisis intensified in North America. However, professional traders are few in number, moving all that value in just 39,000 transfers per week on average in 2020.

Most of the funds held on an exchange, Chainalysis revealed, are held on some of the top cryptoassets trading platforms including Binance, Coinbase, and Bitfinex.

Featured image via Unsplash.