Lithuanian blockchain payment processor CoinGate, which was founded in 2014, has announced that over 4,000 merchants worldwide that use its services can now accept Bitcoin (BTC) payments over Lightning Network (LN), a “second layer” payment protocol that enables instant, scalable, and low-cost Bitcoin transactions.
Here is how CoinGate works. Imagine you want to sell a product or service and you want to be able to allow customers to pay with crypto; let’s say the price is $10. CoinGate then calculates (by contacting various exchanges) how much the customer would need to pay in bitcoin or 50+ other cryptocurrencies (if Bitcoin is chosen, then there is the option of sending the bitcoin payment over the Lightning Network). The customer uses a crypto wallet to make the payment. You (the merchant) will get paid by CoinGate payment (minus a 1% processing fee) in either bitcoin, euros, or dollars.
One thing that is worth mentioning, even though it may appear obvious to some, is that if a customer wishes to pay with bitcoin over the Lighning Network, he/she needs to have a wallet that supports the Lightning Network, such as the “Bitcoin Lightning Wallet” for Android, which was developed by Anton Kumaigorodski.
CoinGate provides four types of integration for merchants:
- A “Point of Sale” (POS) mobile app (for iOS or Android) for accepting crypto payments in any retail business.
- Crypto payment plugins for various e-commerce solutions (such as WooCommerce and Magento)
- A Merchant Payment API, which “provides full automation for accepting Bitcoin, Litecoin and other coins, unique addresses for each order, real-time transparent exchange rates for customers, and a platform for merchants to track and manage their payment history and payouts.”
- Payment Buttons (for Bitcoin or altcoins) that can be placed on the merchant’s website.
On 24 June 2018, CoinGate explained via a blog post that listed the benefits of Lightning Network and why it had decided to support it. In particular, the post made explained that “the underlying reasoning for launching LN” is their “strong belief that this technology will have a huge positive impact on Bitcoin as a whole.”
Then, around a week later (on 2 July 2018), CoinGate announced via another blog post that it had launched a Lightning Network pilot involving around 100 merchants.
And finally, on 5 September 2018, CoinGate announced that Lightning Network support had gone live, thereby enabling its over 4000 customers (merchants) to accept Bitcoin payments over the Lightning Network without any extra effort.
CoinGate notes that although there is a lot of ongoing development effort aimed at making Lightning Network more user-friendly and reliable, the technology “is in its early days and more suited to advanced users and Bitcoin enthusiasts.”
Dmitrijus Borisenka, co-founder and CEO of CoinGate, said that the pilot launch had been successful:
“We were pleasantly surprised when we came across tweets of our Lightning Network implementation at the Kasbah Bar in Oslo. You may have heard critics claiming, ‘you can’t buy coffee with Bitcoin’. Well, we’re not sure about coffee, but buying beer with Bitcoin within a second for zero fees is definitely possible in Oslo”
Featured Image Credit: Photo via Pexels.com