Bitcoin with Lightning Network - What is it and why use it? FAST & CHEAP transactions

[crushking]

Hi fellow MPGH'ers,

NOTE: Do your own research! Never take advice about crypto from anyone without using reputable sources to research it yourself. This is not for making money, it's simply a better payment mechanism.

I don't post often but have used MPGH for a few years now to buy small ticket items like licenses or game gift cards. I ONLY pay with Bitcoin and Ethereum and seek out sellers that accept it as a payment method. But as others no doubt find, using Bitcoin (even though my favourite crypto) is expensive, slow and I have to use mixing services to not expose my addresses and holdings. So how do we overcome this issue? EASY!

Enter the "Lightning Network"

Bitcoin is a permanent ledger that stores every transaction between parties in an immutable decentralised way. This can be fantastic, however not of much use when it comes to buying small ticket items. It's slow and costly and there is no value to store this transaction. A second layer was built on top of Bitcoin called the Lightning Network. I have used the Lighting network for about 9 months now to pay for many different things - it's practically instant, transactions cost less than 1c, it doesn't expose your Bitcoin addresses and the Android client I use even runs behind Tor.

How does it work?

Both the buyer and seller must have a Lightning Wallet installed and you must already own some Bitcoin. The apps are available in their respective stores:
Android Play Store: Phoenix Wallet by ACINQ
iOS App Store: BlueWallet by BueWallet Services

(Several companies are actively working on the wallets and protocol. Quite a few wallets have been released, but I personally just use the two above.)

SECURITY: When you install the app, it's going to generate a 12 word secret key for you. TAKE NOTE OF THIS BUT DO NOT STORE ONLINE. If anyone sees this, they can steal all your money. You will also need these same 12 words to RESTORE your Lighting wallet if you lose your mobile device.

The Lightning network works by creating channels between buyers and sellers. If there is no direct channel, it's smart enough to automatically find a path between you and them. To get your own channel you need to deposit a tiny bit Bitcoin into a unique address the wallet will generate - this is called FUNDING a Lighting channel which is necessary to create the channel. At any time you can withdraw your Bitcoin back on-chain again to a standard Bitcoin address when you need to.

If you're a BUYER, make sure to put enough Bitcoin into the channel to last you a while. Personally, I deposit about $20 at a time. (I originally put in $100 and it's worth $200 now with Bitcoin's recent run!!)
If you're a SELLER, you just need to deposit enough to fund the channel creation. Probably less than $5.

How do you actually use it then?

After you have followed the in-app instructions, deposited some BTC into your Lighting wallet address and it shows the deposit, the channel has likely been created and you're ready to go.
In the Lightning app the Seller simply enters, in dollar value, the price for the items they're selling and generate an INVOICE. Copy/paste this string to the buyer. The Buyer then copy/paste this string into their Lightning wallet. It'll show them the total amount in dollars and they hit PAY. Seconds later the Seller will have the money.

Steps for Phoenix Wallet - SELLER
1) Tap on "Receive"
2) Tap the little "Edit" icon
3) It'll take you to a "Edit my invoice" screen. You can change the "Amount" drop down to USD (if it isn't already) and type in how much. Tap on "Create Invoice"
4) Now tap the "Copy" icon and paste the string to the Buyer.

Steps for Phoenix Wallet - BUYER
1) The Seller will give you a long string (it starts with "lnbc"). This is the invoice they generated. Copy this string.
2) In the Phoenix app, tap on "Send".
3) Tap on "Paste data from clipboard"
4) Confirm the amount shown is what you agreed on and tap "Pay".

It may sound complicated, but it really isn't. My 9 year old generates invoices all the time using BlueWallet for chores he does around the house. We agree on a dollar value, he generates the invoice and show me a QR code on his screen. I scan it with my Phoenix wallet, make sure the little turd didn't overcharge me and then I hit "Pay".

Need a little motivation?

I'll send $5 USD to the first 3 lightning invoices that are pasted in this thread. Make sure to invoice them at $5 otherwise I won't pay. No strings attached. It just blows my mind we're not using this as the main means of payment on MPGH and that I couldn't find any threads on this topic.

Take care and be safe!

[crushking]

Wow, no one wants free BTC?

Ok, I'll extend the offer. I'll pay $10 USD each to the first 3 sellers on MPGH that start taking Bitcoin lightning payments.

Criteria to qualify:

• Have an active thread in the Market Place "Selling Accounts/Keys/Items" section
• Thread must have existed since 2018 OR you must have more than 2000 replies
• You have to update your main thread post to indicate you now support Bitcoin Lightning payments.

Simply post a link to your seller's thread with a LNURL invoice (you generate these with the lightning wallet) for free $10 USD.

[AlphaCatalyst]

When Bitcoin added lighting support a few years ago I thought this was really a game-changer. I am surprised that more places are not supporting this. Lightning makes BTC usable for small transactions again. Really a big deal. Thanks for championing this!

[Allura]

When Bitcoin added lighting support a few years ago I thought this was really a game-changer. I am surprised that more places are not supporting this. Lightning makes BTC usable for small transactions again. Really a big deal. Thanks for championing this!

Because bitcoin is a trash coin trying to achieve things which coins like ETH can already do. It would be classified as a shit coin if it wasn't first to market.

[Hollow_Knight]

I wouldn't say bitcoin is an fast transaction. I literally waited over 3 hours for 1 transaction to be approved until receiving an account.

[crushking]

When Bitcoin added lighting support a few years ago I thought this was really a game-changer. I am surprised that more places are not supporting this. Lightning makes BTC usable for small transactions again. Really a big deal. Thanks for championing this!

Thank you! One would think since most people on here deal in micro transactions that lighting would really thrive. Times like this I'm reminded again how early in the game we are.

Because bitcoin is a trash coin trying to achieve things which coins like ETH can already do. It would be classified as a shit coin if it wasn't first to market.

Bitcoin is achieving exactly what it's meant to achieve. It's a base layer protocol for transacting value. Being a base layer, it SHOULDN'T include everything. If it does, it becomes too large, too complex and significantly increases the risk when trying to swap parts out, e.g. updating it. This is how the internet works.It would help looking at the OSI network model to get an understanding of how this should work. The base protocol needs to include enough to ensure a second layer can be built on top of it. The second layer can be implemented by anyone else.. there could be many second layers do different things. Remember, on chain records are stored permanently causing the size to become so big that it can only be hosted by large entities, therefore going against centralization. On ETH I often pay over $80-$120 to interact with a smart contracts (unlock, create proxy contract, deposit to liquidity pool, withdraw).
Disclosure: Been in crypto for 7 years and have tried many many shitcoins out there. Made money, lost money. I've learnt Bitcoin that all roads lead to Bitcoin. Holding more Bitcoin should always be the end goal and you use alts to get there.

I wouldn't say bitcoin is an fast transaction. I literally waited over 3 hours for 1 transaction to be approved until receiving an account.

Bitcoin isn't fast for small transactions, but it's incredible fast when you're transaction large value. Much faster than any institution, banking system or government would have you move. Remember, Bitcoin follows free markets ideology (you pay for value depending on how much it means to you rather than inflated artificial values, e.g. higher transaction fee means faster processing). In saying that, it's exactly why second layer scaling solutions like Lighting has been developed. Try it out! Post an invoice and I'll send you $5 USD.

- - - Updated - - -

I believe the reason why uptake has been slow is mostly due to most exchanges not supporting it yet. And why would they if they're making tons of money from withdrawals? Many currently charge a 0.0005 BTC withdrawal fee!
Luckily there are a few front runner exchanges that are implementing it:

• OKCoin to Integrate Bitcoin’s Lightning Network in Q1
• Kraken Exchange announced it would launch support for the network sometime in the first half of 2021
• U.K.-based CoinCorner integrated the solution for users of its exchange
• Bitfinex was one of the first exchanges to offer Lightning Network deposits and withdrawals
• River Financial (US) also offers Lightning functionality for its users.

Once the exchange withdrawal screens start giving you Lightning withdraw options more people will install Lightning wallets and for many it'll become the default.

[Allura]

Bitcoin is achieving exactly what it's meant to achieve. It's a base layer protocol for transacting value. Being a base layer, it SHOULDN'T include everything. If it does, it becomes too large, too complex and significantly increases the risk when trying to swap parts out, e.g. updating it. This is how the internet works.It would help looking at the OSI network model to get an understanding of how this should work. The base protocol needs to include enough to ensure a second layer can be built on top of it. The second layer can be implemented by anyone else.. there could be many second layers do different things. Remember, on chain records are stored permanently causing the size to become so big that it can only be hosted by large entities, therefore going against centralization. On ETH I often pay over $80-$120 to interact with a smart contracts (unlock, create proxy contract, deposit to liquidity pool, withdraw).
Disclosure: Been in crypto for 7 years and have tried many many shitcoins out there. Made money, lost money. I've learnt Bitcoin that all roads lead to Bitcoin. Holding more Bitcoin should always be the end goal and you use alts to get there.

I've been in crypto for a little over 8 years and it took me about 6-7 years to realise this (I know, so long) but all the jargon you threw out at me doesn't actually matter. Sure it's cool talking about it with another crypto nerd, but to everyone else, they couldn't care less. Bitcoin and cryptocurrency in general has transitioned from a currency, to a currency to replace fiat, to a currency to replace gold. It's been over a decade and cryptocurrency's real use case is pump and dump. This hodl bs is to keep people people in crypto to drive the price up to sell for something with real value, fiat. I use to be a firm believer of cryptocurrency and what it stood for, but look at its reality, any government regulation talk literally sets the price to burn. What happens when more strict regulations are put on cryptocurrency, like in stocks?

Not to mention that cryptocurrency's insane unnecessary power usage. We are shifting towards a greener earth, cryptocurrency literally gains its value by increasing difficulty, hence consuming more unnecessary electricity.

Lightning network is fast? You know what's faster? Centralised networks like PayPal, visa, MasterCard etc.

I don't hate cryptocurrency, but It doesn't matter how fast transactions are or all the protocols it has. What the world currently has is good enough. Making it even 10 times faster than what it is right now in the real world (visa, MasterCard etc), won't make a difference to people's Daily lives. I am still going to continue trading very small amounts of cryptocurrency because it's the only platform which allows for quick growth and no flat rate fees for trades making it perfect for small trades. But I have cashed out almost everything I had in cryptocurrency this bull run as according to history, it gets dumped on hard for the next few months after the bull run ends.

[crushking]

I've been in crypto for a little over 8 years and it took me about 6-7 years to realise this (I know, so long) but all the jargon you threw out at me doesn't actually matter. Sure it's cool talking about it with another crypto nerd, but to everyone else, they couldn't care less. Bitcoin and cryptocurrency in general has transitioned from a currency, to a currency to replace fiat, to a currency to replace gold. It's been over a decade and cryptocurrency's real use case is pump and dump. This hodl bs is to keep people people in crypto to drive the price up to sell for something with real value, fiat. I use to be a firm believer of cryptocurrency and what it stood for, but look at its reality, any government regulation talk literally sets the price to burn. What happens when more strict regulations are put on cryptocurrency, like in stocks?

Not to mention that cryptocurrency's insane unnecessary power usage. We are shifting towards a greener earth, cryptocurrency literally gains its value by increasing difficulty, hence consuming more unnecessary electricity.

Lightning network is fast? You know what's faster? Centralised networks like PayPal, visa, MasterCard etc.

I don't hate cryptocurrency, but It doesn't matter how fast transactions are or all the protocols it has. What the world currently has is good enough. Making it even 10 times faster than what it is right now in the real world (visa, MasterCard etc), won't make a difference to people's Daily lives. I am still going to continue trading very small amounts of cryptocurrency because it's the only platform which allows for quick growth and no flat rate fees for trades making it perfect for small trades. But I have cashed out almost everything I had in cryptocurrency this bull run as according to history, it gets dumped on hard for the next few months after the bull run ends.

Thanks for your contribution to the thread. I disagree with pretty much everything you've said at a fundamental level. We can keep on comparing our e-peens, debate free markets, decentralization, the supposed "insane.. power usage.." etc but I've got absolutely nothing to gain and our ideologies will never be the same. Instead my time and my energy can be much better spent on helping other sellers and buyers use a much more efficient way to send and receive Bitcoin specifically.

For those in the EU, check out LastBit. Here's a video in the last couple of days showing Lightning network in action combined with a debit card:
https://www.reddi*****m/link/l3f4ul/v...fny3d61/player

[Allura]

For those in the EU, check out LastBit. Here's a video in the last couple of days showing Lightning network in action combined with a debit card:
https://www.reddi*****m/link/l3f4ul/v...fny3d61/player

And for everyone who didn't realize, the guy in the video just paid for something via fiat not Bitcoin. The dude essentially bought bitcoin with fiat, and then used the lastbit card to quickly sell his bitcoin into fiat which he then used to pay for his items. Again showing the uselessness of Bitcoin in the real world. Trade it to make money. Bitcoin won't change the world.

[crushking]

And for everyone who didn't realize, the guy in the video just paid for something via fiat not Bitcoin. The dude essentially bought bitcoin with fiat, and then used the lastbit card to quickly sell his bitcoin into fiat which he then used to pay for his items. Again showing the uselessness of Bitcoin in the real world. Trade it to make money. Bitcoin won't change the world.

Are we going to keep on doing this? The point of this thread was to encourage the use of Lightning network as a means to buy/sell on MPGH instead of using on-chain Bitcoin. I notice you already stickied a thread to discuss Bitcoin. Would you please mind taking these kinds of discussions there? I'd like the focus of this thread to stay on topic as per the thread heading and the original post.

[crushking]

OKCoin now supports the Lightning Network!

https://blog.okcoin.com/2021/03/04/h...tning-network/

[[MPGH]Lily]

Thread will be closed for inactiveness and avoid users post boosting/necro bumping.If you would like to re-open the thread, please send a pm or im to marketplace staff or report the thread to have it opened again.