Replica bitcoins are seen in this photo illustration on November 4, 2017. (Photo by Jaap Arriens/NurPhoto via Getty Images)
Bitcoin adoption is about to take another step forward with the Lightning Network today getting a boost from payment processing startup CoinGate — which is adding all 4,000 of its merchants to the off-chain system.
Those CoinGate merchants which will be able to accept payments via the Lightning Network include Swiss watch manufacturers Chronoswiss and Louis Chevrolet, gaming store Mmoga.com, hosting service Bitlaunch, and adult websites Livejasmin and Manyvids.
The Lightning Network, first proposed by Thaddeus Dryja and Joseph Poon in a 2015 white paper, creates a layer on top of the bitcoin blockchain, where transactions can be passed back and forth before being added to the underlying blockchain.
This should mean transaction speed is greatly increased while costs are significantly reduced.
When sending a Lightning payment, two parties deposit the funds at one bitcoin address, a so-called channel, in which they can exchange funds a limitless number of times.
This maintains bitcoin's security but means small, regular payments don't need to be added to the underlying blockchain until the channel is closed.
Questions have been raised about what Lightning Network adoption will mean for the bitcoin price, with much of the price dependent on transaction fees picked up by miners.
Most are though confident that with increased bitcoin adoption the price will continue to rise.
Yesterday it was revealed Bitcoin's Lightning Network capacity reached 100 bitcoin (around $730,000 at time of publication), according to data from monitoring resource 1ML.
The network’s capacity was as low as three bitcoin as recently as six months ago, revealing the extent of the Lightning Network's growth in recent months.
Back in July CoinGate began a Lightning Network trial with some 100 different stores around the world. However, CoinGate is not currently working with any U.S. companies but hopes to begin doing so next year.
In an email, CoinGate said: "We have processed more than 100 payments, with no single error. In the beginning, we announced that we will reimburse losses if they occur because of a network error, but it actually never happened."
One early user of CoinGate's trial took to Twitter to praise the system.
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