CoinGate, a payment gateway for cryptocurrencies, is planning to launch Bitcoin Lightning Network payments on its platform. As explained in an update published by the company on Reddit, the company is currently testing the technology, and users are invited to join in the tests.
The Lithuanian company serves over 4,000 merchants globally by allowing them to accept bitcoin and altcoin payments which can then be converted into BTC, EUR or USD as payouts.
Utilizing the Lightning Network, merchants could accept payments instantaneously at reduced transaction fees.
CoinGate has been preparing for the integration of Lightning for a while. In 2017, it was an early implementer of Segwit addresses, which fixed the scriptSig malleability problem, thereby making the Lightning Network less complicated to implement.
The company has been experimenting with Lightning payment processing in its sandbox as further tests are being carried out to ensure the stability of the system. Lightning is currently available on its testnet, but there are plans to run live pilot integrations on the mainnet three months from now with a select group of merchants that wish to test the service. The testnet version released to the community is merely for collecting feedback and testing for bugs within the network and in its implementation on CoinGate.
A CoinGate representative told Bitcoin Magazine that the company believes “the Lighting Network is the scaling layer Bitcoin needs.” As a payment processor, CoinGate expects to see an increase in the number of transactions as cheaper transaction fees mean more people will be able to transact and use bitcoin and altcoins accepted on the platform. The ability to receive payments instantaneously will also have “an enormous effect on the convenience of bitcoin payments in both online and retail locations.”
Thaddeus Dryja and Joseph Poon first proposed the Lightning Network in a 2015 white paper as a solution built on Bitcoin. The goal of the network is to make bitcoin more of a day-to-day currency that can be useful for daily trade and micropayments.
Find out more about the Lightning Network here.
Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.