The Big Announcement
A new and exciting stage has just been entered into for Bitcoin with 100 lucky ones starting the Lightning Network testing. The Lightning Network has been talked about ever since its conception back in 2015 and it still remains an industry changing piece of software. It also offers scaleability which in the Cryptocurrency world is extremely important. The fact that is allows the Bitcoin transactions to be a lot faster and cheaper is a huge step forward for Bitcoin and its users. There are no miners involved in these Lightning transactions which keeps the costs down. Furthermore because the transactions are between specific users and not the whole community, the transactions are immediate.
How It Works
The very first process is to establish a multi signature wallet between the two parties that would like to complete a transaction. Bitcoins are then placed into this wallet ready for the transaction. The address of the wallet is then added to the Bitcoin Blockchain which in turn establishes the actual payment channel. Once this has been completed both parties are good to go and can go through as many transactions as necessary. There just needs to be enough Bitcoins in the wallet to do this. Bitcoin supplies both parties with a full statement outlining how many Bitcoin in the wallet belongs to who. Once the transactions are all done then the channel can be closed.
What Is Next?
Payment processing specialist company CoinGate is now ready to examine the work that they have done to improve the efficiency of Bitcoin transactions. 100 merchants are now solely responsible for testing the latest version of Bitcoin software – which has the added Lightning Network element – to see whether it is market ready. There is already capital in place just in case this testing period should lose finances.
The testing could well prove pivotal for the Cryptocurrency industry as a whole because it could actually encourage merchants to use the Lightning technology which would increase customer usage obviously. For a lot of merchants too the immediate transactions would make a whole lot of difference for their company. However this still does not mitigate the fact that there are many shoppers that still themselves are not ready for shopping with Cryptocurrencies. International merchants will most certainly see huge benefits from the Lightning Technology. The benefits could be massive in terms of savings in transactions fees that are accumulated with credit card payments.
Although there are many which do not think that the Lightning Network is ready to face the music, CoinGate would beg to differ. And as is often the case – especially in the Cryptocurrency industry – those taking the risk and those trailblazers are often those reaping the rewards. Something which CoinGate is not afraid to do. The company is well aware of the bugs it is likely to face and some of the issues that come along with launching new technology. However, the company is also not afraid to deal with these features head on. The further certainly looks very bright for Bitcoin and it is sure that this testing period takes us one stage closer to a new, faster and more efficient Bitcoin.