With the creation of a new network, Bitcoin will soon be getting a massive boost in how many people are able to use it. The project, known as the Lightning Network, will see CoinGate add some 4,000 of its online merchants to the new off-chain network.
This means that any of CoinGate’s merchant will now be able to accept in the form of Bitcoin. This includes several major companies such as Chronoswiss, Louis Chevrolet, Mmoga.com, Bitlaunch, as well as several adult websites.
The Lightning Network
First proposed in a 2015 whitepaper by Joseph Poon and Thaddeus Dryja, the Lightning Network is meant to add a layer of processing above the Bitcoin blockchain. The network will allow transactions to be passed back and forth before being logged into the blockchain.
When sending payments via the Lightning Network, both parties deposit funds at the same Bitcoin address, which is known as a channel. Then, they are able to exchange funds as much as they want until the channel is closed.
Not only will this extra layer increase transaction speeds, it also reduces the cost of transactions considerably.
There are already several Lightning Wallets available, as well as companies able to process Bitcoin payments on behalf of online merchants. However, the network will bring thousands of new merchants to the party, making it easier than ever for consumers to purchase products from their favorite online retailers using Bitcoin.
What Does This Mean For Bitcoin?
This leaves many people wondering what the Lightning Network could mean for the price of Bitcoin. However, with the increased adoption of Bitcoin, and more people being able to use the cryptocurrency, most believe that the cost of Bitcoin will only continue to rise.
Last July, CoinGate ran a trial with the Lightning Network and managed to process more than 100 payments with merchants from around the world, without a single error. They are not currently working with any U.S. companies, however, they hope to be doing so by the beginning of 2019.