Faster and cheaper bitcoin transactions may soon go alive.
A recent transaction posted on Twitter from inside the offices of prepaid phone payment provider, Bitrefill, used the Lightning network to top up a mobile (for real) at near instant speed with zero fee, as the Tweet touted.
While such transaction is not yet generally available to the public and may still be largely limited to command line interfaces, it nonetheless gives a peek into how the future may look like for regular bitcoin users.
Lightning has been one of the most watched bitcoin-scaling solutions. It's a new layer of abstraction atop the bitcoin protocol that allows transactions to occur more quickly and cheaply, without sacrificing the security. According to data site Bitinfocharts, currently the average transaction fee of bitcoin is at $36.
Yet, people who saw Bosworth's tweet may have been confused because the use case isn't visible to Bitrefill customers. According to CEO Sergej Kotliar, the transaction shown occurred when Bosworth was testing out Bitrefill's implementation with one of the company's developers, by invitation. Bosworth needed to refill his phone at the time anyway, so he decided to test it with real money. It worked.
Wallets need to be updated in order to interact with the Lightning protocol layer, and this has not generally happened yet, Kotliar explained.
Based in Stockholm, Bitrefill primarily focused on enabling people to pay for prepaid phones with cryptocurrency. "Our high-level company vision is to enable people all over the world to use bitcoin as money. Practically we enable people to use their coins to buy everything that is digital and money-like, so pay their bills, refill their phones, vouchers, etc," its CEO told CoinDesk in an email.
Noting that production implementations of new innovations often surface tricky problems, the small team at Bitrefill decided one way it could contribute to bitcoin was to move quickly to adopt Lightning, but doing so also helped it to address frequent concerns voiced by its consumers around transaction costs and delays.
"Recent mempool overloads have affected us hard, but over time a bigger concern for us has been confirmation times," Kotliar wrote. "Here the instant transactions of lightning lets us make a truly great customer experience. Lightning solves not only confirmation times but also many other UX problems of bitcoin."
Kotliar urged peer companies not to wait to implement Lightning. He wrote:
Lightning bolt photo via Shutterstock.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.