Bitcoin adoption, getting people to exchange their bitcoins for goods and services, continues to be a problem for cryptocurrencies — but that could be about to change as the closely-watched Lightning Network continues to grow.
Now, enterprising Spanish hardware hacker Ricardo Reis has shown how bitcoin’s Lightning Network can be used to buy items (in this case bottles of Coca-Cola) from a vending machine. You can watch Reis’s video, published over the weekend, here.
The modified vending machine receives a bitcoin payment via a built-in QR code and through the Lightning Network. While this is still far from a commercial proposition, it demonstrates how the Lightning Network could allow small bitcoin transactions to happen on a much bigger scale than is currently possible.
Bitcoin’s Lightning Network 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 and the concept has been backed by bitcoin fan Jack Dorsey, the founder of micro-blogging site Twitter and U.S. payments processor Square.
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.
In September payment processing startup CoinGate announced it was adding all 4,000 of its merchants to the off-chain system.
CoinGate merchants which can now accept payments via any Lightning Network-enabled bitcoin wallet include Swiss watch manufacturers Chronoswiss and Louis Chevrolet, gaming store Mmoga.com, hosting service Bitlaunch, and adult websites Livejasmin and Manyvids.
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.
The bitcoin price has been on a downward trend throughout much of 2018 after last year’s bull run, which saw the price of one bitcoin soar from less than $1,000 at the beginning of the year, to almost $20,000 by December.
This year it would appear investors are waiting to see whether established financial institutions decide to move into bitcoin and cryptocurrencies markets before they either buy more or bail out of crypto.
Global regulators have also been trying to get a handle on the bitcoin and cryptocurrency industry, which has been accused of being a digital “wild west.”