Bitcoin payment is not dead, Lightning Network has become a new battlefield for startups

Bitcoin has always been a stalker of "digital gold," but early startups built around the technology are actually more concerned about bitcoin payments. In the past, Bitcoin supporters have promised to offer instant, free transactions to merchants who have decided to adopt this peer-to-peer digital cash system, but as people increasingly see Bitcoin is not enough to act as a global digital payment. After the infrastructure, these sounds slowly disappeared – at least not when the Bitcoin network remained fully decentralized.

In the past few years, value storage and speculative use cases have been the main areas of focus for Bitcoin users (see the Bitcoin handling fee market for details), but recently there have been some companies that want to re-use the Bitcoin network as an online payment system.

The market's new interest in bitcoin payments is almost entirely due to the development of Lightning Networks, which is based on payment and is the second layer of the Bitcoin network. Lightning Networks enables instant and almost free payments without the need for excessive compromises in decentralization and anti-review capabilities.

Although Stephen Pair, the CEO of BitPay, the well-known Bitcoin payment startup, said at Bitcoin 2019 that his company had a “wait and see” attitude toward the Lightning Network, other startups did not choose to stand by.

But is Bitcoin really ready to be the more widely used exchange medium? We contacted the managers of four bitcoin startups in the field (Bitrefill, Fold, Lolli and OpenNode) in hopes of a clearer understanding of the progress of the Renaissance in the field of bitcoin payments.

Is the timing of bitcoin payment now?

As we all know, online bitcoin transactions are completely unsuitable for general daily payments. The bitcoin startup we interviewed also agrees with this idea.

“To be a viable means of payment in real life, the transaction speed must be increased, otherwise no one would want to use Bitcoin because it is inefficient in the store,” said Alex Adelman, CEO of Lolli. "For example, if you buy a latte at Starbucks in Manhattan during peak hours, neither the merchant nor the customer would expect a delay in the system. We all know that bitcoin processing time is not instantaneous. Therefore, we need to be able to reduce the fee and In this case, the lightning time network or other second layer scheme that shortens the processing time."

In the eyes of OpenNode CEO Afnan Rahman, Lightning Networks effectively fulfilled the promises made by early Bitcoin startups—fast, cheap online payments.

"We believe that Lightning Networks can not only fulfill these commitments, but also negate the use cases of 90% of the coins you see on the market today," Rahman said.

For John Carvalho, chief operating officer of Bitrefill, it is the unique features of the Bitcoin Lightning Network and the improved payment experience that drive adoption.

“For example, with a lightning network, merchants can make accurate invoices and receive payments instantly through BTC,” explains Carvalho. “When we are shopping or withdrawing money from an ATM, the lightning network experience is much better than the standard Bitcoin network.”

Earlier this year, Carvalho revealed that at Bitrefill, Lightning Network Payments has become more popular than any of the competitive currency payment options. Bitrefill specializes in selling various forms of gift cards and mobile phone top-up cards in exchange for Bitcoin and competitors.

Bitrefill has been around for many years, but the company has recently made a name for itself among Bitcoin enthusiasts because of the lightning network-related products and services they developed.

Fold has experienced the success of Lightning Networks through the Lightning Pizza website, which allows users to purchase Domino Pizza at a 5% discount through Lightning Network.

“We know people want to pay with Lightning Networks because they do it every day at Fold and Lightning Pizza,” said Fold CEO Will Reeves. “Once participating in the lightning network, we find that people spend much more on it than they do with credit cards. We should not underestimate the power of this network, it provides a one-click payment without friction, while protecting Privacy and let consumers control their spending data."

Create incentives for the adoption of bitcoin payments

As Reeves points out, for Fold and other companies, the user-friendly nature of Lightning Networks combined with Bitcoin-related self-sovereignty has given them some success. However, both Fold and Lolli are trying to bring additional incentives to this mix through the rewards program.

“Compared to swiping credit cards, Fold hopes to give Lightning Networks more economic incentives and unparalleled privacy,” Reeves said. “People don’t need to provide details of the payments that might be leaked, and there’s no longer any transaction history being sold.”

Long-term Bitcoin enthusiasts will know that Fold is not a new company. The company was founded in 2012. Initially, users can use Bitcoin to pay through Fold's app and receive a 20% discount at Starbucks.

On Wednesday, Fold launched a rewards program that will provide similar incentives for users of well-known retailers using Bitcoin. Just a few weeks ago, the startup just officially launched their lightning network integration.

On the other hand, Lolli's choice is to put a long line, and the overall plan they use to promote merchants is (as Lolli CEO Alex Adelman said at the Bitcoin 2019 conference) in the early days to traditional payment methods such as credit cards in a number of well-known retail stores. Shopping consumers offer bitcoin rewards.

“I think the adoption of Bitcoin and Lightning Networks will require merchants to motivate consumers to use Bitcoin instead of other currencies,” Adelman told Longhash. “The incentives that merchants are currently getting are reducing refunds and credit card fees. I personally think they should pass it on to consumers to increase the mainstream adoption rate of Bitcoin.”

Is the Lightning Network ready to usher in its golden age?

Of course, the question remains whether the lightning network is ready for the golden age. Although OpenNode believes that Lightning Networks is slowly becoming ready for mainstream use, there are still considerable questions about whether people can use Lightning Networks in a user-friendly way.

From a technical point of view, the lightning network is a huge achievement, but it is also quite complicated. At the moment, the basic question is whether users can avoid all of this extra complexity in the various applications that use this new payment technology.

“I think the concerns about the complexity of the lightning network are overstated,” Carvahlo said. “People who need the qualities of Bitcoin or Bitcoin are mostly capable of learning to use new software. The availability of lightning protocols and supporting applications will be greatly improved, but it will not actually be better than using bits. The currency is a lot more complicated."

In Reeves' view, the most serious usability problem is actually the responsibility of those developers in this area, because these issues are not necessarily inherent in the lightning protocol itself.

“It’s not trivial to get people to use lightning networks. There are a lot of things to improve when you enter the channel,” Reeves said. “However, most of the most serious usability issues need to be addressed by those who are developing in this area, which are often not inherent in the agreement itself – and I am fully confident that we can meet the challenge.”

Having said that, it feels like every month – even every week – there will be new tools for these applications to simplify the experience of the Lightning Network. Users may never need to know features such as watchtowers, autopilots, submarine swaps, and atomic multipath payments, but these are for the bitcoin in the payment field. Application developers of usability issues are invaluable development modules.

It is also worth noting that the lightning network is not the only viable second-tier payment solution. Other options, such as statechains or payment-focused drivechains, may eventually assist the lightning network.

“Sidechain or any multi-layered solution can bring huge benefits because it can offset any unnecessary expansion of the Bitcoin blockchain,” Rahman said. “We have seen these protocols strong enough and can work together, so there is no need to rely on any single solution.”

Whether through lightning networks, other Tier 2 solutions, or different payment innovation portfolios, Carvalho believes that merchant adoption should be a natural development process.

“Direct merchant adoption should not be achieved in a coercive manner; it is also unhealthy to try to 'train' more hodler,” Carvalho said. “At Bitrefill, we solve the problem of merchant adoption by adding a gift card product to our catalog. This eliminates the urgency of the merchant's direct adoption of Bitcoin. Importantly, the Bitcoin ecosystem is providing the benefits that are currently required in the market. The encryption economy is growing, but the technology is still growing rapidly compared to the market size. The current adoption speed seems to be healthy."

Although Volkswagen may not be ready to use Bitcoin for daily payments, developers are working hard on solutions such as Lightning Networks to provide better users for those who are ready to use Bitcoin as a medium of exchange. Experience. In addition, over time, these protocols will enable bitcoin networks to better cope with more and more users.

Author: LongHash , data read block chain.