CoinGate Opens 100 Merchant Pilot To Trial Lightning Network For BTC Payments
The bitcoin (BTC) Lightning Network continues its roll-out process. Earlier today, payment processing startup CoinGate revealed the launch of a risk-free Lightning Network trial available to 100 merchants.
The trial allows 100 merchants to try the Lightning Network risk-free. It’s a pilot program meant to showcase the technology, which is expected to significantly reduce costs and increase scalability on the bitcoin network.
CoinGate revealed the trial exclusively to CoinDesk.
“As with CoinGate's standard service,” explains CoinDesk, “the company will handle the finer details of crypto-to-fiat exchange, however, the new pilot has the benefit of covering the costs should funds be lost due to the early-stage nature of the software (lightning implementations are now largely in beta)”
In other words, merchants get a risk-free trial of the Lightning Network, with any potential losses covered by CoinGate if something goes wrong.
Despite the trial, most experts continue to believe the Lightning Network isn’t ready to support significant commercial transactions. CoinGate doesn’t dispute this fact, but believes there are benefits in testing the waters.
“It’s a very new technology,” explained CoinGate CTO Rytis Bieliauskas in a statement to CoinDesk,
“Inevitably there will be some bugs, either in our implementation or in the Lightning Network. It will help, not just us, but the whole community because the bugs we find might help the whole protocol.”
CoinGate is facing significant risk with this Lightning Network trial. Theoretically, Lightning Network invoices are limited by the LN protocol itself to 0.042 BTC apiece, or about $300 at today’s prices. However, CoinGate hasn’t established a limit to how many invoices the company will reimburse if funds are lost.”
Do you wonder where you can pay with #LightningBitcoin? The list of featured merchants includes @Bitgildcom, @bacloud, @thunderpickco, @LiveJasmin and @hometicker_shop! Want to see more? Check it on our blog! #LightningNetwork #LN
>>> https://t.co/VfBbf41Q0M pic.twitter.com/rytscAf2hF
— CoinGate (@CoinGatecom) July 11, 2018
Trial Merchants Require Trial Shoppers
One of the problematic things with the Lightning Network is that shoppers will need to use their own Lightning-enabled wallet – like Zap. This is where the trial could run into its biggest problems.
“At least for the time being,” explains CoinDesk,
“Few shoppers have the resources to send cryptocurrency from a Lightning wallet such as Zap. But this pilot could test whether Lightning actually tackles some of the issues that deter mainstream merchants from prioritizing crypto payments in the first place.”
While a number of merchants have already signed up to join the platform, these merchants might struggle to attract sufficient numbers of Lightning Network users making payments with wallets like Zap.
Adult Content Platform LiveJasmin Has Already Joined The Trial
While customers may not jump on board, CoinGate has already attracted at least one merchant: adult content website LiveJasmin.
Romania-based LiveJasmin joined CoinGate’s Lightning Network trial to test LN’s ability for instant payment processing. The website receives 40 million visitors per day, which could make it the largest website to implement Lightning Network so far. LiveJasmin plans to use the Lightning Network to facilitate instant, cryptocurrency-secured payments across its website.
“There’s Still A Long Way to Go” For Mainstream Lightning Network Adoption
Critics of Lightning Network claim that it’s a technology that will never become mainstream. It’s too clunky, too centralized, and too error-prone to be adopted by the general public.
Supporters of Lightning Network, meanwhile, claim that it just needs time – like any new technology, there will be growing pains and problems that need to be solved along the way.
As explained by CoinDesk, however,
“most acknowledge there’s still a long way to go until mainstream merchants could safely use Lightning.”
CoinDesk cited the founder of payment processor GoCoin, Steve Beauregard, who described Lightning Network as,
“still very complicated for an average end-user.” Nevertheless, he claimed it might be useful for “international merchants that are trying to accept payments from overseas.”
A number of other merchants have already applied to CoinGate’s trial, including collectibles maker Bitgild, which offers silver and gold coins engraved with QR codes that function as private keys for real cryptocurrency.
The ultimate goal with Lightning Network is to create a payment platform capable of processing millions of transactions per second – similar to how Visa and Mastercard’s networks work. This trial is a step in the right direction – although we’re still a long way away from widespread Lightning Network adoption among the general public.