Some lucky merchants now have one less hurdle in accepting bitcoin payments via the Lightning Network.
Exclusively revealed to CoinDesk, payment processing initiation CoinGate is opening a pilot program that will allow 100 merchants to try a Lightning-enabled version of its service, which draws on open source technology intended to make bitcoin transactions fast and cheap.
As with CoinGate’s standard service, the company will handle the finer details of the crypto-fiat exchange, however, the new pilot has the benefit of covering costs in the event of a loss of funds due to the early stage nature of the software (implementations flash are now largely in beta).
And while most experts believe the network is not yet ready to support meaningful business transactions, CoinGate CTO Rytis Bieliauskas thinks there is a greater advantage that will be achieved in being among the first to test the waters.
He told CoinDesk:
“It’s a very new technology. Inevitably there will be some bugs, both in our implementation and in the Lightning Network. It will help, not just us, but the whole community because the bugs we find could help the whole protocol. “
Although Lightning bills are typically limited by the protocol itself to 0.042 bitcoin each, or less than $ 300 based on current prices, CoinGate CCO Vilius Semenas told CoinDesk that there is no set limit on the number of bills CoinGate will refund in the event of a loss of funds.
At least for the moment, few buyers have the resources to send cryptocurrency from a Lightning wallet like Zap. But this pilot could test whether Lightning actually addresses some of the issues that discourage traditional merchants from prioritizing crypto payments in the first place.
For example, bitcoin latency poses an issue for CoinGate customers as does Luxembourg-based adult content platform LiveJasmin.
“Instant payments are the most important from our perspective,” said Tamás Szerencse, LiveJasmin’s head of payments, explaining why the company joined CoinGate’s Lightning project.
With up to 40 million daily visitors, LiveJasmin could become one of the largest mainstream merchants to experience Lightning so far. Experimenting with more diverse transaction types could provide valuable insight into how Lightning works in nature.
Learn from experiments
As such, CoinGate is emerging as one of a small, but growing number of crypto payment processors to make the leap. (Last week GloBee helped the crypto hardware wallet accessories supplier CryptoCloaks accept his first payment.)
However, most recognize that there is still a long way to go before traditional merchants can safely use Lightning.
Steve Beauregard, the founder of the GoCoin payment processor, told CoinDesk that he agreed with Bieliauskas that layered networks might be able to reduce the friction for recurring payments, but he acknowledged that the technology is still around. you start, which will likely limit buyers.
“It is still very complicated for the average end user to use it [Lightning]”Beauregard said.” I think the ones that would benefit most would be international merchants who are looking to accept payments from overseas. “
Most of the dealers who applied for this pilot project were companies such as the collector’s item manufacturer Bitgild, which offers silver and gold coins engraved with real cryptocurrency QR codes, targeting customers already fascinated by Lightning’s experiments.
In addition to cross-border payments, Bieliauskas said Lightning-enabled transactions may soon provide a cheaper option than credit cards for merchants dealing with micropayments or payments that are worth a fraction of a cent.
For now, Beauregard said the main value offered by such Lightning pilots is the opportunity to participate in experimental research.
Speaking at this point, famed Lightning developer Alex Bosworth agreed that this pilot project will provide a learning opportunity for the entire network. Lightning’s most useful features for merchants are still in development.
Bosworth told CoinDesk:
“In the future, a nice thing about Lightning merchants is that if they bill you in one currency and the payer wants to pay in a different currency, it will be possible.”
Bitcoin image via Shutterstock