Lightning Network Isn’t The Ultimate Solution to Bitcoin Scaling Issues Says Bitrefill CEO Sergej Kotliar

News and Analysis

Bitrefill was one of the first companies to embrace Lightning Network for its mobile phone top-up service, however, as CEO Sergej Kotliar admits, the technology has its own tradeoffs and shouldn’t be considered “the entire solution of all the scaling problems forever.”

Bitrefill recently began selling gift vouchers for Amazon and other brands — effectively opening up Bitcoin Lightning Network (LN) payments to almost any item. This technology has been getting some attention as of late for its impressive growth in recent months, and for Bitrefill it was a quite straightforward decision.

In an interview with Bitcoinist Sergej Kotliar said:

“We’ve been closely monitoring the technology, it’s something that has been known since a long time back that payment channels would be the way to scale bitcoin to the masses… So when the first working prototypes became available it was a no-brainer to start tinkering with the technology.”

According to him, Lightning is not the only thing the Sweden-based company done to improve payment experience.

“We’ve gone quite a bit with just optimizing bitcoin payments and wallet management, integration different altcoins, off-chain integrations and such things as well. What Lightning does for UX is that it separates away most of the tricky stuff like getting transactions confirmed etc. from the merchant – all that is handled inside the wallet. So when the user comes to us all trouble has already been solved so to speak, and their experience with us is simple. This is to be compared to traditional cryptocurrency payments where issues can happen due to the sending wallet, the state of the network, or due to something within our control.

“The neat thing about all of that is that Lightning is “bitcoin-like”, in the sense that anyone can run it, it’s an open protocol, doesn’t need any other coins, deals, consortiums or proprietary tech of any kind.”

Sergej Kotliar insists LN is definitely ready enough for early adopters already, and the experience with the Android wallets available is already quite good, despite being beta. The main things missing, according to him, are good wallets for desktop and/or iOS, that doesn’t require running a full node.

“For transfers between exchanges and other exchanges all the needed pieces are already in place, so just waiting for it to start happening soon,” he added.

When asked which technology that LN enables he likes most, like cross-atomic chain swaps, submarine swaps etc., Sergej Kotliar said he’s “most excited about simple payments, getting a good user experience for bitcoin users for paying and getting paid for stuff.”

“Once that stuff is sorted I think we as a community should direct our attention to using it to help people earn and receive coins. We have some prototypes in the pipeline in that direction, but it’s generally a large question that we will start pushing harder soon,” he says.

However, Sergej Kotliar also admits LN has tradeoffs, and different people have different views when valuing different tradeoffs.

“Lightning definitely has tradeoffs as well, and I don’t think it’s the entire solution of all the scaling problems forever. But it’s a good way to grow another 10x or 100x maybe until someone much smarter finds the next way to optimize it and so on.”.

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