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When we think of Lightning payments, a standout example is El Salvador’s adoption of Bitcoin as legal tender, facilitated by the Lightning Network. This network uses Bitcoin Lightning to fulfill its primary purpose—remittance transfers—while avoiding the exorbitant fees associated with card transactions, which can range from 1.4% to 3.5% per transaction.
Additionally, the Lightning Network addresses several other issues. Payment confirmations, which often depend on the fee percentage, are expedited as Lightning allows users to open separate channels. This enables the sending of multiple transactions without the need to wait for confirmation from the slower main net.
Through smart contracts and multi-signature techniques, Lightning ensures that funds reach their intended recipients securely.
How does the lightning network payment work?
The Lightning protocol enhances security by routing payments through the network, either completing transactions or maintaining a trustless system by declining them. To make transactions, a user must run a Lightning Node and open a channel with another Node.
Once connected, users can send and receive payments. The process begins with the recipient initiating an invoice, which is sent to the sender’s node. The recipient’s node then acknowledges receipt of the payment.
Lightning transactions occur almost instantly. For instance, if person A wants to send person B some Bitcoin, they simply create a channel by funding it with Bitcoin to start off-chain transactions.
For example, suppose John has an open channel with Jonathan, and Jonathan with Marco, but Marco does not have a channel with Frank. In this scenario, Frank can send a payment to Marco through John. The Lightning Network automatically searches for the shortest and/or most cost-efficient routing over several hops.
Use cases for lightning network
Cross border payments
With reduced transaction fees and faster processing times, businesses can enable hassle-free cross-border payments for their users. Crypto wallets offer a superior alternative to traditional methods of cross-border money transfer, which can be time-consuming and expensive. Moreover, European companies benefit from crypto-banking as a service platform that allows them to manage funds flow in a seamless and user-friendly manner.
Payouts & Payrolls
Lightning simplifies and speeds up payrolls and payouts for international talent, allowing businesses to compensate with Bitcoin much faster and cheaper than traditional methods. Direct payments eliminate the need for intermediaries, simplifying the process and reducing costs for consumers.
Swaps & Transfer
The Lightning Network uses contract payment channels to lock the Bitcoin amount between two nodes, facilitating unlimited offline transactions within the combined balance limit. These transactions are secure, fast, and scalable, with the option to enforce on-chain if required. The network supports instant cross-chain swaps between different blockchains without needing a third-party custodian, offering an efficient solution for cryptocurrency users.
Bitcoin Swaps
Engage in decentralized P2P transactions on the Bitcoin blockchain and eliminate intermediary parties such as centralized exchange platforms or liquidity pools. The additional layer of safety provided by self-executing smart contracts ensures crypto security in case of disputes or conflicts. Micropayments on Lightning enhance transaction speeds and reduce the high fees associated with on-chain transactions.
Simplify BTC transactions with one API
Striga’s Lightning Network API allows easy integration of Bitcoin Lightning into business models, simplifying deposit and withdrawal processes.
The onboarding flow is fully customizable via the API. All you need to do is plug in the KYC SDK into your app and start onboarding your European end users and allow them to deposit, withdraw, buy, sell, and spend Bitcoin via Lightning and on-chain transactions, as a basis point for your broader payment application.
Once a user is successfully verified, they are provided with a default wallet containing one account for each currency. To move funds, you must enrich the account with deposit credentials, giving you a unique, dedicated crypto address for user-specific interactions with the blockchain.
After a successful enrichment, you can deposit funds to the user address, and offer them vIBANs for native Bitcoin on-ramp and fiat off-ramp via the Lightning Network. For a full-on crypto experience, issue BTC cards and let your end-users pay daily bills with Bitcoin, online or offline.
How Bringin took Lightning payment to the next level
Aiming to bridge the gap between Bitcoin and traditional finance, Bringin’s Bitcoin-heavy use cases ensure compliance with EU requirements. Meaning, every time users send or receive fiat to move BTC, Bringin provides a unique IBAN in their name and not in the name of Bringin or other exchanges, thus ensuring safe on and off-ramp and facilitating cross-border payments.
Further, by supporting Bitcoin Lightning transactions and traditional on-chain payments, Bringin ensures faster and lower-cost transfers, thereby improving the overall usability for both off-ramp and Bitcoin remittance use cases.
Striga’s crypto infrastructure has further enabled Bringin to operate within the regulatory framework by providing custody, trading, banking, and lightning APIs.
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