CardCoins Offers Bitcoin Payments Over the Lightning Network

CardCoins’ new Lightning integration will allow customers to receive bitcoin payments quickly and cheaply.

AccessTimeIconDec 15, 2021 at 2:00 p.m. UTC
Updated May 11, 2023 at 5:49 p.m. UTC
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CardCoins, a website that lets users trade prepaid gift cards for bitcoin, now offers users the choice to receive their BTC over the Lightning Network.

The Wyoming-based startup says this new option opens up a new speedy way for users to pay for Bitcoin with cash. Most methods of purchasing bitcoin, such as buying at an online exchange like Coinbase or Kraken, require a credit card or bank account. CardCoins users can buy the required pre-paid gift cards with cash at over 80,000 stores across the U.S.

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  • The Lightning Network is a second-layer payment that aims to significantly improve Bitcoin’s often frustrating mainchain experience by making payments faster, cheaper and more scalable. While Lightning payments are not as widely accepted as normal bitcoin payments, it’s on the uptick.

    Now that bitcoin is legal tender in El Salvador, some companies there such as McDonalds are accepting payments sent via Lightning. As of last summer, popular paid newsletter platform Substack began to accept the novel form of payment. Twitter even lets users tip others with Lightning.

    Providing financial access to the unbanked

    For CardCoins, adding Lightning support is a matter of ensuring that their users still have an option to buy bitcoin on their platform when transaction fees are high – which is an inevitability if the number of people using Bitcoin continues to grow. The Lightning Network, built on top of Bitcoin, has much less expensive fees.

    “Our users make a lot of low value payments, and as fees in the Bitcoin network rise they risk being priced out. With CardCoins’ new Lightning integration, our customers can top up their Lightning balances and make payments without additional on-chain transactions,” a CardCoins representative told CoinDesk. A normal Bitcoin transaction, which is typically more expensive than Lightning, is what’s known as an “on-chain” transaction.

    Some of CardCoins’ customers rely on their services, and Lightning can help make sure the service stays cheap even when fees swell. “As a business that primarily serves the unbanked and cash-preferred demographics, it’s imperative that our customers can participate directly in the Lightning Network,” the representative added.

    CardCoins is also a possible method of buying “non-KYC” bitcoin for users interested in preserving their privacy. CardCoins requires identifying information to a degree, as the company’s compliance policy explains. But for users exchanging up to $500 a week, only a phone number is required. For the privacy-minded, it’s possible to add a number that isn’t strictly tied to an ID.

    How to buy bitcoin with cash

    What’s the process exactly? Once a user buys a Visa, Mastercard or American Express non-reloadable prepaid gift card, which are available at CVS, Walgreens, and other large U.S. retail stores, they can use the CardCoins website to trade it for bitcoin over the Lightning Network.

    You’ll notice the price of bitcoin on CardCoins is more expensive than it is on most exchanges. That’s because CardCoins builds in a fee into the price for providing their service.

    In order to successfully send the gift card to CardCoins, the user needs to enter how much the gift card is worth, a phone number, the gift card identifying numbers, and photos of the gift card. The process is described in more detail on the CardCoins website.

    On the payment page, it’s now possible to enter a Lightning invoice to accept a Lightning payment. An invoice is a long string of random characters making up a unique address that a Lightning payment can be sent to. It’s kind of like a temporary credit card number,

    Users can use a Lightning wallet like Breez or Phoenix (or any of a range of other wallets) to accept their bitcoin payment.


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    Alyssa Hertig

    Alyssa Hertig is a programmer and journalist specializing in Bitcoin and the Lightning Network. She's currently writing a book exploring the ins and outs of Bitcoin governance. Alyssa owns some BTC.

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