Bitcoin payment processor Coingate announced a new trial program based on the bitcoin lightning network today. The trial is the first of its kind and will be offered to just 100 merchants while Coingate continues to build and develop the platform to handle greater capacities.
Bitcoin payment processor Coingate announced a new trial program based on the bitcoin lightning network today. The trial is the first of its kind and will be offered to just 100 merchants while Coingate continues to build and develop the platform to handle greater capacities. The lightning network, first proposed in 2015, is an intermediary between the bitcoin blockchain and smaller individual transactions. Basically, the lightning network records a number of transactions in a “lightning channel” before ultimately settling the net balance of the channel in the blockchain itself, similar to the batching process of traditional payment processors. Thus, individual smaller transactions are not broadcast to the blockchain one-by-one, but rather, the net transaction amount between the two parties is recorded at the completion and closure of the lightning channel.Experts believe that use of the lightning network will reduce the possibility of bitcoin being lost in transactions, as the blockchain remains unchanged until the lightning channel is closed and approved by all participants. While lightning channels are currently capped at maximum balances of 0.042 bitcoin (approx. $300), Coingate hopes that the data collected during their trial will give valuable insight into the viability of the lightning network on a greater scale.“It's a very new technology,” said Coingate CTO Rytis Bieliauskas, “inevitably there will be some bugs, either in our implementation or in the lightning network. [The trial] will help not just us, but the whole community because the bugs we find might help the whole protocol.”Even still, the developers admit that no matter how successful the trial may be for the lightning network in general, it likely won’t be widely adopted by most end users right away. While the technology is still in development, its primary use will likely be for merchants hoping to make international transactions without having to deal with currency conversions and overseas transactions fees.For more information on Coingate’s trial and accepting bitcoin payments, visit https://coingate.com/.