Actually, when you buy bitcoins, you have to deal with high fees, and you also have to wait several days before a transaction is validated. Some startups are searching for solutions, and Coinfinity came up with the Lightning Network; it allows people to make light-speed fast transactions, and it has recently completed its first transfer to an ATM.
The problem of Bitcoin’s scalability
Bitcoin knew an extreme growth of popularity during 2017, and one of its consequences is a constantly bigger amount of daily transactions. There are so many of them now that they became very slow, and many people are choosing to use other cryptocurrencies instead, such as bitcoin Cash, because they’re more practicable. To rescue the Bitcoin, the Lightning Network has been created by the Coinfinity startup in Austria. They based the way it works on how every transaction has to be validated in order to be added to the blockchain.
Every Bitcoin’s transfer is stocked in blocks, and each block is stacked upon each other in a linear way, which mean the next block can’t be validated before the previous one is. This can take a very long time when there are millions of transactions made in the same minute on the entire network. Validations are made by third party computers which are linked to the Peer2Peer network, and when there’s not enough computing power, it will obviously be done on a slower rate.
Lightning Network for faster Bitcoins transactions
The world heard about Coinfinity as the company who made the first Bitcoin ATM of the history. If it’s not possible for Bitcoins transactions to happen in a totally independent way from the blockchain, it’s doable to use a secondary network that takes profit of how the blockchain works. The Lightning Network is based on “channels of payments” created on the blockchain, through which people can send Bitcoins whenever they want.
Coinfinity claimed that millions of transactions could potentially occur at the same time on the Lightning Network without any trouble, at a fast rate and with low fees. However, the LN is still on a trial period, and we will have to wait before its efficiency is confirmed. Transactions are fast and less expensive, and they also can be more private, as your transactions won’t be stored forever on the blockchain.
Lightning Network is already gaining popularity
When the Lightning Network was announced, many companies shown interest for such technology, and we can mention TorGuard, a VPN and proxy provider. The latter stated to accept Bitcoin payments if they’re made through the Lightning Network.
If there’s no major issues with this technology during the trial period, small transactions can be easily done with LN, and it will be safe for companies to accept payments in Bitcoins. For example, the ATM transfer was worth of only 50 Satoshis. Most exchanges won’t actually let you send Bitcoins if it’s under a certain amount, because it might end up being too expensive for them at the end of the transaction.