The coin has dropped for cryptocurrency investors as new Bitcoin technology has opened the way for consumers to make small purchases.
Failing to let people spend their Bitcoins on day-to-day goods and services has always hampered the mainstream take up of cryptocurrencies.
To become a viable alternative to hard currency, digital coins must become a means of exchange and carry some value that is not forever changing.
The first step on the road to acceptance comes from Bitcoin’s Lightning Network.
Developed in response to criticism that the Bitcoin blockchain is too slow and clunky to handle millions of simultaneous financial transaction, Lightning is technology on top of the underlying blockchain.
Vending machine demo
Lightning stores transactional data and later transfers the details to the blockchain.
Now, one developer has shown how a vending machine can be adapted to accept an electronic Bitcoin payment via a QR code.
It’s fair to say the idea is under development and small-scale, but does show the future is bright for digital currencies.
The vending demo is not the only Lightning Network small purchase development.
Crypto start-up CoinGate has piloted a Lightning Network plug-in with 100 retailers.
“Lightning Network is in its early days and more suited to advanced users and Bitcoin enthusiasts, but a huge community of developers is working behind the scenes on making it user-friendly and accessible to a wider audience. By implementing Lightning Network, CoinGate is dramatically reducing the technical barrier on the merchant’s side, essentially making it effortless, while users can enable or disable Lightning with a toggle of a switch,” says a CoinGate blog.
CoinGate cheered the success of Oslo’s Kasbah Bar in allowing customers to pay for beer with Bitcoin on the Lightning Network.
The slow speed of the Bitcoin blockchain is quoted by some as a reason why the cryptocurrency will never be adopted as money.
Ethereum and XRP Ripple are faster and better suited as a means of payment.
“One area of confusion about blockchain is the perceived negative environmental impact, but this is a problem specific to Bitcoin and some other cryptocurrencies,” says an article in Forbes magazine.
“It is caused by the limitations of the decade-old design of bitcoin and due to Bitcoin’s mining process that requires a “proof of work” to validate transactions. Proof of work is a mathematical algorithm that is essential to validate transactions in the Bitcoin blockchain and consumes huge computational power and energy close to what Denmark consumes annually.
“Other cryptocurrencies operate differently. Ether, for example, uses the proof-of-stake concept, which is energy efficient, while the cryptocurrency ripple does not require mining.”