A Ukrainian citizen was recently sent cash in Poland from Miami, USA, via Bitcoin’s Lightning network and a little help from a BTC developer who helped the citizen download and set up a wallet electronic money on the phone. The citizen received the amount in Bitcoin on her crypto wallet and was able to withdraw the amount in cash through the Bitcoin ATM, with the whole process taking about three minutes to complete. The process highlights how the Lightning system works for peer-to-peer (P2P) payments and how you can use it for cross-border payments.
According to CNBC report, a Ukrainian citizen downloaded a self-contained crypto wallet app for Bitcoin and Lightning on his phone and generated an invoice as a QR code. The folks at CNBC then captured that QR code with a scan in their own crypto wallet and transferred over 50,000 sats (or Satoshi) with transaction fees amounting to an insignificant amount. Ukrainians who were at the site of a Bitcoin ATM in Southwestern Poland were then able to withdraw the amount in cash.
Bitcoin’s Lightning network is a layer 2 system built on top of Bitcoin to allow people to transfer/receive payments natively and reduce transaction fees by keeping them off the mainnet. Essentially, the Lightning Network makes Bitcoin more usable as an everyday currency.
In one transaction, you can only deposit a minimum amount of Bitcoin – about 0.00000546 BTC. At the time of writing, it was around Rs. 17. Lightning Network allows you to push the limits to trade the smallest unit available – 0.00000001 BTC or one Satoshi.
High fees for ordinary transactions make sending small amounts on the blockchain seem futile. Although in a channel you are free to transfer a portion of Bitcoin for free.
Bitcoin’s Lightning Network provides users with an excellent level of security. While you could look at the blockchain and show that this transaction opened a channel, you wouldn’t be able to tell what was going on inside it. If participants make their channel private, only they will know about the transactions going on.
