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.

Could President Trump Ban Bitcoin? Experts Weigh In

  • Experts weigh in on the possibility of President Trump banning bitcoin.
  • Increasing concern over libra and large platform digital currencies is driving political agenda. 

Following last week’s attack on bitcoin and Facebook’s libra, experts have voiced their opinion on whether US President Donald Trump could realistically impose a ban on cryptocurrency. 

Not a Fan of Bitcoin

On July 11, President Donald Trump published a series of tweets attacking bitcoin and digital currencies, while championing the dollar. 

President Trump’s comments come in the midst of growing concern over Facebook’s libra, as political regulators around the world scramble to enact policies to deal with the rise of digital currencies. 

Members of the crypto community have questioned the impact of the US President taking an unfavorable stance towards bitcoin. Some crypto pundits predicted the tweets would be good for the price of BTC and ultimately increase exposure to cryptoassets. However, others worry that political influence may lead to a crackdown on cryptocurrency usage. 

Scenarios for Banning Crypto

Alex Kruger, economist and market analyst, published a tweet thread examining the legality and possibility of President Trump banning bitcoin. 

According to Kruger, It would be almost impossible for the US government to outlaw bitcoin as a technological instrument. Aside from the Herculean task of eradicating a decentralized, digital technology, bitcoin is code, which is protected under the first amendment.

However, that same protection is not extended to third-party operators, including cryptocurrency exchanges. 

Kruger quoted Abra CEO and Founder BIll Barhydt, who explained in a Forbes article how the government could target fiat onramps to exchanges, 

“You can’t prevent people from holding ones and zeroes on a device in their pocket. That ship has sailed. We already know that. The question is: What can they do at the edge of the network -- the onramps and offramps, the places where they exert control over the banking system, the exchanges, [and the] stablecoins.”

The US government could prevent retail investors from having access to crypto-assets through exchanges and prevent banks from allowing transfer of funds. Users would still be able to buy crypto through alternative channels, but the current ease of investing would be severely hampered. 

Unlikely, But Not Impossible

President Trump could also issue an executive order banning citizens from dealing in bitcoin, similar to the one he issued against the Petro. While there is a precedent for this route, Kruger claims the order could be easily overturned by Congress, 

Ultimately, Kruger believes that it is unlikley the President or Congress would move to ban bitcoin, and it would be difficult to enact fool-proof policy. However, it's worth considering the political landscape as regulatory concerns mount over Facebook's libra.

Just last week, a copy of a bill reportedly drafted by the House Financial Services Committee surfaced online, under the title "Keep Big Tech Out of Finance." The bill would put an end to Facebook and other large platforms from issuing digital currencies without incurring a severe penalty.

The same could be extended to bitcoin in the event the government finds crypto-assets no longer tolerable for the general public.