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CoinGate Pilot Allows Merchants To Test Lightning Network

The cryptocurrency payment gateway recently launched a Lightning Network pilot.

According to a recent announcement, the crypto payment service CoinGate is allowing over 100 merchants to accept Lightning Network (LN) payments as part of the company’s pilot program. The announcement comes after CoinGate tested LN payments on its demo shop. The company stated, “Several projects have recently been started to promote [LN’s] adoption, and we are really pleased to be among the first ones to do so.”

Various types of merchants are participating in the pilot, from the eSports betting platform Thunderpick to Sūpynės, an annual electronic music festival in Lithuania. Other represented services include cloud hosting, VPNs, shopping, and adult entertainment.

The LN, a concept introduced by Joseph Poon and Thaddeus Dryja in their white paper, is a web of payment channels that interacts with and relies on the Bitcoin network for security, but allows transactions to be made off-chain. This web allows two users to create their own ledger where they can exchange funds without recording each transaction on the blockchain; only the net transaction results are posted on the main chain. Poon and Dryja introduced the LN concept as a potential scalability solution.

A few different parties are developing LN technology, including Lightning Labs and the Elements Project. The Raiden Network is a similar idea, but it works with the Ethereum protocol. Both the LN and Raiden Network are considered part of blockchain’s “second layer,” which is a catch-all term to describe auxiliary technology (like platforms and protocols) operating off the main chain to save storage space.

Additional crypto-based services are also testing the LN. Last month, Poketoshi was released, which allows users to play Pokémon on the Twitch platform using an LN-enabled controller. Each command using the controller costs 10 satoshi.

Despite strides to develop and promote LN technology, there are still skeptics. A study released toward the end of June stated that “the reliability of successfully routing a payment on the Lightning Network is still quite low, especially for larger amounts.” It could be some time before the LN is appreciably adopted.

Daniel Putney is a full-time writer for ETHNews. He received his bachelor’s degree in English writing from the University of Nevada, Reno, where he also studied journalism and queer theory. In his free time, he writes poetry, plays the piano, and fangirls over fictional characters. He lives with his partner, three dogs, and two cats in the middle of nowhere, Nevada.

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