From the humble beginnings of a cup of Starbucks coffee, now a phone bill has been paid with the Lightning Network.
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Programmer Alex Bosworth paid his phone bill with Bitcoin through a service called Bitrefill, according to Bitcoin.com.
Mainnet Lightning Network paying my actual phone bill with actual Mainnet funds on @bitrefill. Speed: Instant. Fee: Zero. Future: Almost Here. pic.twitter.com/futhn502Lp
— Alex Bosworth (@alexbosworth) December 28, 2017
Bosworth said that the test was fully real, but in a limited testing environment - meaning that the payment was made through a mainnet wallet, but the wallet is not yet widely available.
Bitrefill supports SIM card topups to 400+ mobile operators in 100 countries (or 600+ operators in 150 countries, depending on which page of its website you are reading). Payment can be made in Bitcoin or Litecoin.
As Bitrefill says on its website: "Sometimes during high load on the Bitcoin network, and especially with older wallets that don't use proper fee estimations, it can happen that transactions don't confirm for long time. This is an unfortunate consequence of how Bitcoin works."
This is exactly the issue that the Lightning Network was designed to solve. Its website explains that by circumventing the Blockchain , users can avoid the lengthy verification process and high transaction fees which are making Bitcoin transactions unworkable.
Making transactions off-blockchain is made possible by using the blockchain programme to create separate ledger entries, which are added to the main chain at a later point, when they are closed. As the website describes: "This is similar to how one makes many legal contracts with others, but one does not go to court every time a contract is made."
There are many altcoins which claim to solve the technical issues of Bitcoin. However, Bitcoin has continued to succeed because of perceived value - people generally prefer to pay with Bitcoin than an altcoin, because it is something that they recognise.
More importantly, the problems faced by Bitcoin are a result of its popularity, and it follows that a given altcoin will face similar issues if it becomes popular too. For example, Ethereum, heavily used for ICO generation and a certain cat game, saw its transaction fees rise from virtually nothing to a peak of $0.71 on December 14th, according to a report in Forbes.
Thus, a system like Lightning, which could improve the utility of Bitcoin itself, is very much in demand - Bitrefill actually began testing the network back in August. Now, following the successful transaction, CEO Sergej Kotliar said: "Everything is ready to go on our end, but we're not launching it yet until a Lightning wallet is released for general use on mainnet."
