Merchants Invited To Take Part in Lightning Network Bitcoin Test

Lightning Network Bitcoin Blockchain Cryptocurrency

A group of 100 merchants have been invited to take part in early testing of the Lightning Network bitcoin protocol, courtesy of cryptocurrency payments startup CoinGate.

The pilot scheme will allow the merchants to trade on a Lightning Network-enabled blockchain, designed to process transactions more quickly and at reduced cost.

CoinGate will handle the crypto to fiat transfers for merchants participating in the scheme, as is the standard model for their service. However, the scheme comes with the added advantage of protecting funds in case of loss, by virtue of the early-stage nature of the Lightning technology.

The Lightning Network has been hailed as a solution to bitcoin’s technical challenges, a mechanism for increasing the speed and reducing the cost of bitcoin transactions.

CoinGate’s chief technology officer, Rytis Bieliauskas, said that while the technology was still new, it had the potential to revolutionize merchant payments on the bitcoin blockchain.

“It’s a very new technology. 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.”

While invoices on the Lightning Network are typically capped at around 0.042 BTC, CoinGate has confirmed it will underwrite an unlimited number of these contracts, in the event that funds are lost.

At present, there are very few shoppers who could technically send funds from Lightning wallets. However, the pilot is being held up as a trial of the technology in practice, and to establish whether it works to solve the problems that have plagued payments on the bitcoin blockchain.

While CoinGate has emerged as one of the pioneers of Lightning technology, they concede there is still some way to go before the technology could be adopted by merchants en masse, a view shared by payment processor GoCoin.

GoCoin’s founder, Steve Beauregard, said that the Lightning Network held promise, but still had challenges to overcome before it could become more widely used.

“It’s still very complicated for an average end user to use it (Lightning) ... I think the ones that benefit the most would be international merchants that are trying to accept payments from overseas.”