Coinfinity, an Austria based cryptocurrency startup, has accomplished the first ever bitcoin transaction via the Lightning Network (LN) through a Bitcoin ATM. The historic off-chain bitcoin transaction was completed at the Cofinity office marking a historic achievement.
The Coinfinity blog stated “To establish a connection to the lightning network, a payment channel was funded through this transaction. For this early demonstration, we purposely set a fixed amount of 50 Satoshi as the actual payment.”
A Solution to Bitcoin’s Network Congestion
Coinfinity is acknowledged for its expertise in the crypto industry, where in the past it had introduced the first Bitcoin ATM. Additionally, it has launched a web-based cryptocurrency trading platform in Austria. Lightning Network, the proposed solution to the Bitcoin network’s congestion problem and high transaction fees, enables users to transact via off-chain payment channels. The key benefit of LN transactions is that they are instant and cost very little. For the past few months, Bitcoin has been suffering from network congestion and high transaction fees, allowing other altcoins like Bitcoin Cash and Stellar to substitute bitcoin as a payment method.
Coinfinity’s website describes the Lightning Network as follows:
“A technology which is seen as a very promising solution for the scalability problem of bitcoin, although it is still in an early stage of development. It could potentially process millions of transactions each second, fast and almost without a fee.”
More importantly, the introduction of this second layer will again make bitcoin a feasible payment option, even for small transactions. The lightning network also allows users to transact with each other and not publicize their exchange on the main blockchain.
LN is Growing Swiftly
At present, the Lightning Network has 429 nodes and about 968 open payment channels. In comparison, Bitcoin Cash, the fourth largest cryptocurrency by market cap, currently has 1167 nodes. In the past, the anonymous VPN and proxy service provider, TorGuard, announced its acceptance of payments via Lightning. The Lightning Network facilitates instantaneous payments across the Bitcoin blockchain and is gaining popularity with more and more businesses employing the network. However, users should be cautious as the nascent software might have issues such as loss of funds on the network, as Lightning is still in its experimental phase. Coinfinity’s website reads:
“Even though the lightning network still is in an experimental stage, we made a big step towards mass suitability of bitcoin. The next months will be extremely exciting!”
Will more businesses employ the lightning network? Let us know your opinion in the comments section.