The pace of technological innovation in crypto finance is nothing short of astounding. Bitcoin, the “magic internet money” of yesterday, is now knocking on the doors of high street shops, bars and restaurants.
The Lightning Network (LN), a web of interconnected nodes managed by crypto enthusiasts, is driving this revolution. LN transaction throughput and speed are already rivalling those of Visa and Mastercard for a fraction of the cost.
Vlad Goryachev is a former Wall Street derivatives trader and structurer turned Bitcoin enthusiast. This article is part of CoinDesk’s Crypto 2023.
More and more retail establishments are thinking to start accepting “crypto,” but don’t know where to start. This guide will present and compare side by side all the available options for the business owners to make an informed choice.
I’ll start by describing the solutions in alphabetical order and conclude with a summary matrix that could help retailers decide which to integrate. To qualify, each implementation must satisfy two criteria:
1) Enable businesses to accept BTC payments via Lightning Network
2) Do that face-to-face, (i.e., mom and pops and Box Top stores should be able to generate a Lightning invoice/QR code a client can scan to pay)
Some of the solutions will present an option to automatically convert the proceeds into local currency, others will not. It will be up to the business owner to decide whether to hold bitcoin or do the conversions manually.
I leave out of the scope other blockchains and stablecoins. In this day and age they are objectively inferior to LN as a payment rail.
BitPay
A U.S. company that offers a centralized wallet and bookkeeping suite with ability to accept a range of cryptocurrencies, including bitcoin over the Lightning Network. To use it, a Lightning QR code is generated by the “BitPay Checkout” app linked with a users online BitPay account via an API code. Proceeds can be converted into local currency and withdrawn via ACH, SEPA, FPS, etc. Full KYC [know-your-customer] enrollment is required to start using the service. The company charges a flat 1% fee on the proceeds. Funds are at risk until withdrawn, because the wallet is centralized.
