The use of Bitcoin and the concept of cryptocurrency might be a ready answer to different problems plaguing the financial sector but it sure has its limitations, and ‘micro-payments’ sits chiefly at the top of its issues.
Spanish hardware hacker, Ricardo Reis seems to have found a solution to bitcoin instant payment as demonstrated in an illustrative video on YouTube. By addressing the long-standing challenge with a proof-of-concept vending machine accepting Bitcoin transactions through Lightning Network, the hacker might just have eliminated one of the biggest hurdles preventing the mass adoption of cryptocurrencies.
Vending Machines: The perfect case example
What other way is there to put micro-payments to tests without a handy vending machine? Vending machines are known to be usually stocked with low-value items, where customers can easily purchase and satisfy imminent needs. “Imminent” however is not a good adjective to describe the Bitcoin (BTC), given the amount of time it takes to make one complete transaction, and the charge involved–a loss at both ends.
The Bitcoin transaction fee at press time is $0.23, and confirmation can take up to ten minutes. Apart from the fact that making micro-purchases with BTC would be foolishly uneconomical, no one wants to spend ten minutes at a vending machine just to get a chilled bottle of coke. The Bitcoin fee is also bound to increase at periods of very high demands.
LN to a Lightening Rescue
Lightning Network (LN) might just be the holy grail to Bitcoin’s growing issues. The network has been garnering recognition and attention in recent times due to the simplicity and efficiency of solutions offered to ensure instant transactions. Some of its recent partners include CoinGate– which announced in September that all 4,000 of its merchants were making transactions through Lightning Network, and a popular Cafe in Switzerland accepting the order and pays through LN.
By creating a layer on top of the Bitcoin blockchain, the network allows multiple transactions to occur on channels before the consequent compound transaction is written to the main chain. This way, transactions are made at lightning speed and reduced fee.
Although Reis’ make-shift vending machine might not be ideal, it just as much proves what is needed to integrate the Bitcoin (BTC) into every day common transaction.