Lightning Network has been integrated into a Swiss gold exchange called Vaultoro.
Vaultoro is a Switzerland-based company that offers a Bitcoin wallet which allows the exchange of Bitcoin with certified gold held in the company’s vault. The company’s blog post states that it is the first exchange to implement the protocol.
The Lightning Network
The Lightning Network is a protocol which adds a second layer to the Bitcoin blockchain. Its purpose is to facilitate day-to-day transactions with Bitcoin. It does this by circumventing the main blockchain, processing transactions separately and adding them to the main blockchain later. This avoids the lengthy and prohibitively expensive process of making a Bitcoin transaction of a small value.
Litecoin creator Charlie Lee famously (and considering the most recent use case, aptly) explained the Lightning Network with the following analogy: “Fiat is to gold as lightning network is to Bitcoin.”
It is seen as promising because it combines the ease-of-use of many small-scale altcoins with the established value of Bitcoin – one bitcoin is now worth more than $9,000.
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It was initially launched in beta in December 2017 and was used to buy a very well-publicised cup of coffee at Starbucks. By March 2018 it had accumulated more than a thousand nodes and it was released in beta on the Bitcoin blockchain.
Stellar Lumens, a blockchain payment system with a market capitalisation of over $7 billion, announced that it will be implementing the system this year, and most recently a developer proposed combing the protocol with near-field communication technology to enable contactless payments.
Vaultoro allows peer-to-peer gold trading and is thus the quickest way to purchase and sell gold. This process is likely to be made even speedier with Lightning.
At the moment however purchases are capped at 100 Satoshis (0.000001 BTC), enough to purchase 0.1 grammes of gold.
Joshua Scigala, co-founder of Vaultoro, said: “This first implementation will allow Vaultoro’s users to send Bitcoins instantly, cheaply and privately. Our next goal is to enable people to take orders from the order book directly from their controlled wallet. Vaultoro traders will be able to deposit funds in milliseconds without having to trust our exchange hot wallet if set to instant order.”