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CoinGate’s Lightning Network To Boost Bitcoin Adoption, 4,000 Merchants Already Onboard

The Lightning Network is about to breach the 102 BTC capacity, and that could very well be the nicest thing to happen to Bitcoin of late. The Lightning Network brings to Bitcoin what everyone has been waiting for all along: A faster, secure payment processing system right at the top of the Bitcoin blockchain. That’s exactly what CoinGate sought to achieve when it introduced the Lightning Network.

It’s Like An Off-Shoot Of The Chain

Basically, this network acts as an off-chain layer to the Bitcoin blockchain where a batch of transactions can be processed before the underlying general chain or ledger is updated. This has the good effect of boosting the transaction processing speed since the system doesn’t have to update every transaction instance separately.

Granted, such a positive development would obviously attract players and support from various bases, especially the key stake-holders like merchants. At the moment, CoinGate has decided to add its 4,000-strong merchant base to the Lightning Network, a move that could result in an overall improvement in terms of use of the cryptocurrency. In return, this increased adoption would boost Bitcoin’s trading volumes and impact the coin’s market value positively.

Speed, Low Fees, Sharp Growth, And Zero Errors

Besides processing transactions in milliseconds, the Lightning Network also significantly reduces transaction fees. The Lightning Network facilitates instant transactions and boosts the scalability of the underlying Bitcoin blockchain network. Currently, various versions of Lightning Wallets are used by a number of transaction processing entities that act on behalf of the merchants.  The merchants include Lois Chevrolet, Livejasmine, and Chronoswiss. The network was first introduced by Joseph Poon and Thaddeus Dryja back in 2015 when the Lithuanian-based company, CoinGate, entered the market.

A look at the network’s recent growth rate confirms that its impact on the Bitcoin market will be significant. Over the past month alone, the network’s capacity has shot up by 5%, node count has increased by 10%, and channel count has gone up by 6%. At the moment, the network boasts 3,369 nodes running over 12,000 channels. Within the past 6 months, the network capacity has shot up from 3 BTC to the current 102.64 BTC.

During its initial beta test, the network was involved with 100 stores selected from all across the world, and not a single error was recorded. That’s a huge plus for a payment processing system that’s handling billions of transactions per second. In terms of partnerships, CoinGate is yet to associate with any US entity, but that’s expected to happen in the coming year. All said and done, the Lightning Network seems pretty poised to take Bitcoin adoption to a whole new level.

The post CoinGate’s Lightning Network To Boost Bitcoin Adoption, 4,000 Merchants Already Onboard appeared first on Ethereum World News.

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Bitcoin ATMs Find Love In Greece, Market To Boom

Over the last few months, crypto ATMs have grown popular in various regions in the global financial market, with many market players getting onboard. Crypto ATMs allow users to buy or sell their digital assets like Bitcoin, Litecoin, Ethereum, Dashcoin, and others. Greece is one of the countries where these machines are fast gaining popularity.

What Makes Them Tick?

At the moment, there’s one crypto ATM in the Greek region of Thessaloniki and 4 in Athens. Media reports indicate that more Greek cities will embrace the use of crypto ATMs in the near future, with more of such machines set to be installed in various parts of the country in the coming months. Stefanos Getsopoulos is the co-founder of a popular crypto company, Thess Cash Hallas, and he says that plans are underway to install 3 more crypto ATMs in Northern Greece.

The love of these ATMs is largely driven by many crypto users’ preference of a freer financial and investment market as opposed to the largely centralized institutions like banks. As such, many users opt to use cryptos to avoid the centralized system. Also, some cryptocurrency users embrace the use of the ATMs as they provide an easier way to access their assets faster. In fact, crypto ATMs allow users to liquidate and withdraw their digital assets in fiat currency wherever they are. This advantage makes the ATMs even more popular in the crypto community.

There’s A Boom In The Offing

A report released recently by MarketsandMarkets, a research firm, projects the global crypto ATM market to hit north of $144.5 million by the year 2023, with a Compound Annual Growth Rate (CAGR) of about 54%.  Just last year, the market value totaled around $6.8 million. Currently, the market value stands at about $16.3 million, meaning that in the next 5 years, the global crypto ATM market is expected to grow eightfold.

Understandably, this projected market expansion might come as a shock to some, but a critical look at the figures of 2017 compared to the current figures gives all the indications of an exponentially growing market. In the last few months from 2017, the market has expanded by upwards of 50%.

According to the same report by MarketsandMarkets, the growth of the crypto market would also trigger an increase in the overall number of transactions conducted through the ATMs. This would, in turn, create the need for more crypto ATMs in service. There are now about 3,650 BATMs (Bitcoin ATMs) in service around the world, with about 4 machines being commissioned every single week.

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Coinbase Submits Patent Application for Bitcoin Payment System

Coinbase has submitted a patent application for a new Bitcoin payments system with enhanced security protocols. This patent filing is the latest in a series of applications submitted by the company as they continue to be prolific in the area of protocol development for the emerging cryptocurrency ecosystem.

Details of the Bitcoin Payments System

According to a filing with the United States Patent and Trademark Office (USPTO) published on Tuesday (August 14, 2018), Coinbase described a system that could function as a payment portal. This payment portal would be capable of carrying out transactions right from the cryptocurrency wallet of the user.

A portion of patent filing reads:

It may be a security concern for users that the private keys of their Bitcoin addresses may be stolen from their wallets. Existing systems do not provide a solution for maintaining security over private keys while still allowing the users to checkout on a merchant page and making payments using their wallets.

How the System Works

A summary of the patent filing describes a system where users via a “key ceremony” encrypt their passphrases into masterkey. The reason for the encryption is to prevent the theft of the masterkey. The masterkey is in turn used to encrypt both the user’s private key and the transaction itself. After every transaction, the masterkey is deleted.

Another important component of the system is the introduction of freeze/unfreeze capability. The freeze logic is utilized when the user reports that they have been hacked. Explaining the process, the patent application said:

At any point in time after the master key is loaded, the system can be frozen. The system can be unfrozen after it has been frozen using keys from the key ceremony. The checkout process can be carried out when the system is frozen and when the system is unfrozen. The payment process can only be carried out when the system is unfrozen and not when the system is frozen.

In addition to the security protocols, the proposed Bitcoin payments system also has API integration capabilities to enable websites to run versions of the payment portal. As an extra layer of security, the API paradigm utilizes a pair of keys – one stored on the server of the website and other stored with Coinbase. For any transaction to be approved, the two keys must match.

What do you think about the freeze/unfreeze functionality of the proposed Bitcoin payment system? Keep the conversation going in the comment section below.

Image courtesy of USPTO.gov

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Overstock Sees Cryptocurrencies as a Great Business Opportunity

Overstock, an online retail giant famous for embracing crypto-friendly policies in 2017, announced the satisfactory results of the application of its new business model.

Jonathan Johnson, a member of Overstock’s board of directors, informed that the company grew to accumulate capital of more than 1Bn USD, with earnings in cryptocurrencies exceeding 100k:

“We have somewhere between $68,000 and $120,000 a week in cryptocurrency revenues; people buying sheets and toasters using bitcoin or ethereum or other coins.”

Jonathan Johnson

The company took the first step in adopting cryptocurrencies in late 2017 when they announced the launch of a $250 million Initial Coin Offering on December 1 to boost their business model.

In this regard,

, a research fellow at the University of Cambridge who studies cryptocurrency, expressed to CNN his optimism about the consequences of this business move for the Overstock team:

“Overstock would be the largest existing company to launch an ICO to date … Blockchain is going to change the world more; I think than the internet has.”

Garric Hileman

During June, the behavior of its stocks value has been bullish, although at longer intervals it has fluctuated with regular oscillations.

Graphic Provided by Tradingview

For the Overstock team, the acceptance of cryptocurrencies has proved to be a reasonably successful strategy, boosting not only their business model but also improving the user experience when using the website.

According to information provided by crypto-portal The Bitcoin Pub, Jonathan Johnson mentioned that the use of cryptocurrency is exceptionally convenient.

In that sense, not only he compared a transaction in cryptocurrency with the use of cash, but also commented that for the team, cryptocurrency represents an even cheaper option than the use of FIAT money.

“We pay a processing fee for credit cards, and we employ about 40 people in our fraud department. That’s a cost of doing business with credit cards. When we take cryptocurrency, we have a very small transaction fee with Coinbase, much smaller than our credit card processing fee, and we have no fraud prevention department. It’s like a cash transaction. For us, that is a much cheaper way of doing business.”

The fact that business of overstock’s characteristics succeeds thanks to the use of cryptocurrencies is a plus for blockchain enthusiasts. Overstock may be an adoption reference in the future.

Besides Overstock, Other Companies Are Using Cryptos to Boost Their Business Models.

In addition to the well-known applications for the porn industry with PornHub and Playboy at the forefront, other companies are accepting payments in bitcoin and altcoins on a daily basis:

From a beautiful catalog of boats through Denison Yacht Sales , to the possibility of purchasing smartphones, tablets and all kinds of gadgets thanks to Trading Shenzen, the options to use cryptos seem to be increasing for blockchain enthusiasts.

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Czech Utility Company To Start Accepting Bitcoin (BTC) Payments

The Czech Republic is leading the way in terms of Crypto adoption. One of its largest energy suppliers, Pražská Plynárenská, has announced that it will start accepting payments from customers in the form of cryptocurrencies. The first to be rolled out, will be Bitcoin (BTC) payments that will be available as soon as early June. This move brings the energy sector closer to the cryptocurrencies that use the valuable resource for mining.

Pražská Plynárenská is one of the largest Natural Gas suppliers in the Czech Republic with a customer base of over 420,000. The company is also actively engaged in solar P.V installations, electricity and home heating systems. The company further provides automated data processing, software delivery and IT training and consultancy services. The Czech company also has a hand in the telecommunications industry, real estate maintenance, motor vehicle maintenance and road passenger transport.

It is with this background of Pražská Plynárenská diversifying its business that it is no surprise that the company intends on embracing cryptocurrency payments. The CEO of the company, Pavel Janeček, was very emphatic about the new service and had this to say:

In June, we are opening a payment gateway, which will automatically transfer our bitcoin payments into regular currency, so that we don’t have to speculate with cryptocurrency. But if anyone wants to pay in an alternative way, we want to allow them to do that.

This new service will make the company more appealing to the younger generation in the country who are used to mobile devices, fintech apps and now cryptocurrencies.

The Czech Republic has seen an increase of Cryptocurrency adoption with many Czechs willing to use Bitcoin (BTC) rather than the Euro. Most of the Czechs actually prefer to store their hard earned earnings in BTC rather than the local Koruna.

With regards to the market performance of the King of Crypto, BTC is holding steady at $7,508 and down less than a percentage point in 24 hours. Ethereum (ETH) on the other hand has risen 1.85% in 24 hours and is currently trading at $598.

Hopefully as the weekend comes to a close, and also the end of the month, we shall see more funds moving into the crypto-market to build the much needed volumes.

[Photo source, cryptoren.com]

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Square Books Small Profit for First Quarter of Bitcoin Sales

Digital payments startup Square made more than $34 million in revenue in the first quarter from cryptocurrency purchases.

In a 10-Q filing submitted to the U.S. Securities and Exchange Commission, Square declared its financial results for Q1 2018, noting that roughly 5 percent of its revenue came from customers purchasing bitcoin through its Cash app. Due to the costs of purchasing the cryptocurrency, the company’s total profit in the time period is about $223,000.

According to the filing:

“For the three months ended March 31, 2018, the revenue recognized from contracts with customers was $648.8 million, including $34.1 million from bitcoin sales. Revenue from other sources was $19.8 million. Impairment losses arising from contracts with customers were not significant in the current reporting period.”

However, the cryptocurrency-based revenue is offset by the $33.9 million it cost to purchase the bitcoin in the first place, according to the filing. Square defines its bitcoin costs as “the amounts we pay to purchase bitcoin in the public cryptocurrency exchanges or from customers. The amount of bitcoin costs will fluctuate in line with the associated revenue.”

Square first enabled bitcoin buying through the Cash app last November as part of a pilot program open to a limited number of users. At the time users were unable to make bitcoin payments using the app.

The company changed this policy in late January, when it gave users the ability to send payments to friends and family members. Bitcoin payments also expanded to almost all U.S. customers, with the exception of those in New York, Georgia, Hawaii and Wyoming – all being states with tougher regulations around cryptocurrencies.

Bitcoins and dollar image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Merchant Adoption Might Just Be Accelerating In Asia

Bitcoin isn’t for payments?

While that may be the popular narrative of late, don’t tell that to Bellatorra Skin Care, a luxury brand that has found the opposite as it’s expanded internationally into markets such as China and India.

Not only is bitcoin (which has seen years of declining interest from merchants as the network bumped up against its limits) a sought-after choice for business-to-business (B2B) payments, but for retail payments, other cryptocurrencies are finding a foothold as well.

“We expanded our business internationally this past year, and have had strong demand [for cryptocurrency] from customers in markets such as China and India, where fiat cross-border transactions have inefficiencies,” said Nathan Halsey, the CEO of Bellatorra, based in Beverly Hills, California.

Halsey told CoinDesk:

“We have found cryptocurrency to be a viable solution for resolving these challenges, and we see other companies with international business adopting the same practices.”

Indeed, one of the early use cases highlighting bitcoin’s innovation was cross-border payments where there were bottlenecks and high fees for transacting.

Bellatorra ran into these hurdles in Asian markets and says its wholesale customers began asking for the option of paying in bitcoin. So in July 2017, the company began a relationship with bitcoin merchant services provider BitPay.

“We have completed multiple six-figure transactions, without an issue, and have settled funds from the time of customer payment to settling in U.S. dollars in our U.S. bank accounts in less than one business day,” Halsey continued.

And according to BitPay CEO Stephen Pair, Bellatorra’s experience in circumventing cumbersome traditional payments rails with crypto isn’t uncommon. Cosmetic companies such as Nuciya Beauty in Canada have found that people tend to spend more per purchase when they use cryptocurrency.

As such, Bellatorra is looking into adopting other cryptocurrencies, and making them a bigger segment of their business, in the future.

“We are definitely pro-cryptocurrency as a payment option,” Halsey said, adding that the company has started holding onto small amounts of the cryptocurrencies it accepts instead of immediately cashing out.

Diversifying retail payments

For its retail customers, Bellatorra has already begun accepting litecoin and ether, ethereum’s native cryptocurrency.

Since BitPay doesn’t facilitate merchant payments in anything other than bitcoin and bitcoin cash, Bellatorra had to establish relationships with other processors to enable these cryptocurrency payments.

According to Halsey, using PayWithEther.com and GoUrl.io, Bellatorra garnered dozens of litecoin and ether payments from predominantly Asian customers spending roughly $300 to $1,000 per order.

While bitcoin’s transaction fees have come down significantly over the past several months, the thought of high fees has caused some merchants to hedge, according to Jimmy Song, a well-respected developer and partner at Blockchain Capital.

Yet it’s not only a hedge but also a way to solicit more sales, Song said.

Cryptocurrency trading has seen huge amounts of adoption in Asian markets recently, with many industry observers asserting that if cryptocurrency businesses aren’t targeting these markets, they’ll be left behind.

And according to Bellatorra’s Halsey, there’s no reason for a merchant business to not turn on the option since it’s so easy.

“I can tell other companies looking at the space that if you are used to taking a credit card for payment, this is every bit as simple if not simpler,” he said.

An Asian persuasion

Yet, the rapid growth of B2B bitcoin payments still dwarfs altcoin use cases for retail payments.

To get an idea of the size of the market, international B2B payments now account for roughly 15 percent of BitPay’s business. And that’s after a 328 percent increase in the payments dollar volume BitPay took in between 2016 and 2017.

Sonny Singh, chief commercial officer at BitPay, told CoinDesk he expects those payments to increase another fourfold in 2018.

These numbers are likely one of the reasons BitPay secured $40 million in a Series B round recently. And the main focus for that money will be expanding its services into Asia, said Pair.

For one thing, a BitPay investor based in China would like to see the company open an office in the country, Pair said.

To make that happen, the company would like to start building relationships with banking partners in China, to offer the ability for merchant clients to cash out into their preferred currency and account, he continued.

Speaking to that focus, Pair said:

“The staff there will be focused on customer service, sales, engineering services, compliance, things you really need a local presence for.”

Beauty products image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Square Adds Bitcoin Buying for More Cash App Users

Digital payments company Square is rolling out the ability to buy and sell bitcoin to more users of its popular Cash App.

The company announced today that, following news last year that it was testing the feature with a limited number of users, the option is being expanded further. That said, users in the U.S. states New York, Georgia, Hawaii and Wyoming – which have more restrictive regulations around the brokering of cryptocurrencies – won’t be able to access the option just yet.

The app allows users to send payments to their friends and family, though notably, they may not be able to share funds to generic contacts on their phones.

The company began trialing the bitcoin buy option last November, letting select users buy or sell bitcoin through their accounts.

In statements on Wednesday, Square chief executive Jack Dorsey (who also leads social media giant Twitter) endorsed the new service, posting that Cash App offers “instant buying (and selling if you don’t want to hodl).”

He continued:

“We support bitcoin because we see it see it as a long-term path towards greater financial access for all. This is a small step.”

In addition to the bitcoin integration, the company also released a dedicated web page explaining bitcoin and how its underlying technology works.

Cash App image by Brady Dale for CoinDesk

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

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Japanese Electronics Retail Giant Launches Bitcoin Payments

Major Japanese consumer electronics retailer Yamada Denki has partnered with cryptocurrency exchange bitFlyer to add a bitcoin payments service in two of its stores.

Launched this weekend, according to a press release, one of the stores to receive the new service is based in Shinjuku, an area of Tokyo that attracts large numbers of foreign visitors. The other store is adjacent to Tokyo’s main business district.

The company said:

“In addition to diversifying [our services], we will implement initiatives to improve bitcoin recognition and usage promotion.”

With the launch of the bitcoin payment system, the company indicated it aims to respond to the diverse needs of its customers both in Japan and overseas. “We believe that we can provide improved service and convenience,” it said.

Yamada Denki has set the settlement limit of bitcoins equivalent to 300,000 Japanese yen ($2,760) per account. Bitcoin is trading around $11,200 (1,218,016 JPY) at the time of writing, according to CoinDesk’s Bitcoin Price Index.

The moves comes after another Japanese electronics retailer, Bic Camera, said last April that it will test a new point-of-sale system (PoS) that will allow customers to purchase goods with bitcoin, also in partnership with with bitFlyer. Later in July, the firm said that it is expanding a bitcoin payment option to all of its stores nationwide.

And, in August, Tokyo-based Marui, a department store chain, tested bitcoin payments at one of its locations in Shinjuku. The trial set a cap of ¥100,000 (about $900) on bitcoin transactions.

Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in bitFlyer.

Editor’s Note: Statements in this article have been translated from Japanese.

Yamada storefront image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

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Payment Processor Stripe Ends Support for Bitcoin, Hypes Altcoins

Stripe, the mobile payment processor with a $9 bln valuation, has announced that it is officially winding down its Bitcoin integration. Over the next three months, Stripe customers will be encouraged to migrate away from Bitcoin payments. After that, Bitcoin will no longer be accepted at all.

Stripe made waves in 2015 when it fully integrated Bitcoin, allowing all vendors who use the platform to accept Bitcoin payments. Many saw this as a sign of impending mainstream acceptance of Bitcoin as a payment method, but high fees and slow transaction confirmations have hobbled the network.

Disappointment

In a blog post, Stripe noted the high hopes the company had for Bitcoin when it first integrated the currency into its platform:

“Our hope was that Bitcoin could become a universal, decentralized substrate for online transactions and help our customers enable buyers in places that had less credit card penetration or use cases where credit card fees were prohibitive.”

Stripe cites slow confirmation times and high fees as the reason for its abandonment of Bitcoin as a payment method:

“This has led to Bitcoin becoming less useful for payments, however. Transaction confirmation times have risen substantially; this, in turn, has led to an increase in the failure rate of transactions denominated in fiat currencies. (By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the “wrong” amount.) Furthermore, fees have risen a great deal. For a regular Bitcoin transaction, a fee of tens of U.S. dollars is common, making Bitcoin transactions about as expensive as bank wires.”

Bitcoin as an asset

Stripe remains optimistic about cryptocurrency as a whole, but the company sees Bitcoin as more of an asset than a payment network:

“Over the past year or two, as block size limits have been reached, Bitcoin has evolved to become better-suited to being an asset than being a means of exchange. Given the overall success that the Bitcoin community has achieved, it’s hard to quibble with the decisions that have been made along the way. (And we’re certainly happy to see any novel, ambitious project do so well.)”

The company’s comments echo those of others in the digital currency space, such as Max Keiser, who see Bitcoin as a sort of “Gold 2.0” rather than a medium of exchange:

“[The digital currency] Dash is emerging as the crypto payment rail while Bitcoin asserts itself as Gold 2.0. I suggest those frustrated by the Bitcoin scaling debate to embrace Dash for payments and leave Bitcoin Core alone to continue working on Gold 2.0.”

Enter the altcoins

While Keiser cites Dash as a more viable payment network than Bitcoin, Stripe cites several other currencies as contenders:

“OmiseGO is an ambitious and clever proposal; more broadly, Ethereum continues to spawn many high-potential projects. We may add support for Stellar (to which we provided seed funding) if substantive use continues to grow. It’s possible that Bitcoin Cash, Litecoin, or another Bitcoin variant, will find a way to achieve significant popularity while keeping settlement times and transaction fees very low.”

Notably, the company has no plans to integrate any of those supposedly “better” currencies into its platform.

Reversible

Stripe has left itself open to reconsider Bitcoin as a payment method in the future:

“We’re interested in what’s happening with Lightning and other proposals to enable faster payments…Bitcoin itself may become viable for payments again in the future.”

With the slow uptake of Segregated Witness and the effective death of plans to increase Bitcoin’s blocksize, all eyes turn to the Lightning Network to make Bitcoin viable again for payments. The Lightning Network has been under development for quite awhile, and there are several competing implementations. None of them are considered to be safe or suitable for general use, however. With Stripe, Steam and others ending their acceptance of Bitcoin payments, it’s clear that if the currency is to be considered a viable network for payments, lightning better strike soon.