Bitcoin Payments

OpenNode sets up BTC payment infrastructure in Bank of Bahrain regulatory sandbox

The kingdom in the Persian Gulf is taking its latest step in transforming its economy away from oil with the Bitcoin and Lightning Network infrastructure provider’s trial.

Bitcoin infrastructure provider OpenNode will test a Bitcoin (BTC) payment processing and payouts solution in the Central Bank of Bahrain’s (CBB) regulatory sandbox, the company announced on Tuesday. This is the latest of several steps the kingdom has taken to join the crypto economy both on its own and as a member of the Cooperation Council for the Arab States of the Gulf (GCC). 

OpenNode will provide the first Bitcoin infrastructure in Bahrain, although the Gulf island nation has been luring fintech companies to its shores for the past several years as it transitions away from a petroleum-based economy. OpenNode CEO and cofounder Afnan Rahman called the agreement with the CBB “a watershed moment for the people of Bahrain, the Middle East and the Bitcoin economy as a whole.”

Bahrain economic development board investment development for financial services executive director Dalal Buhejji commented on the addition of OpenNode to the CBB sandbox:

“As a country, we have always been ahead of the curve in adopting Fintech solutions thanks to our regulator’s flexibility and forward thinking.”

Nonetheless, Bahrain is unlikely to edge out Dubai as the most crypto-forward in the Gulf region.

The CBB set up a regulatory sandbox in 2017 and enhanced it in 2021. Also in 2021, Bahrain licensed the local Sharia-complaint crypto exchange CoinMENA.

Related: Bahrain is Eyeing at Becoming Middle East Pioneer in Blockchain

This year, the CBB licensed Binance to operate in the country, making Binance the first international crypto exchange to receive a license in the GCC. It also partnered with JPMorgan Chase’s crypto unit Onyx to create an instant cross-border payment solution.

OpenNode is currently active in more than 160 countries, including El Salvador. The company was founded in 2018 with financing from venture capitalist Tim Draper and his Draper Capital.

Bitcoin Lightning Network vs Visa and Mastercard: How do they stack up?

Bitcoin’s Lightning Network has been growing at a slow pace. What’s keeping it behind, given its high transaction throughput?

Bitcoin (BTC) changed the world as a decentralized, nongovernmental form of currency that can facilitate peer-to-peer (P2P) transactions that transcend national borders. 

But despite this functionality, Bitcoin’s role as a payment mechanism has been called into question due to its low transaction throughput.

The Bitcoin blockchain can handle up to seven transactions per second, which means that network demand has seen the average transaction fee on the network reach an all-time high above $62 during specific periods.

In order to address low throughput and high transaction fees, developers made the Lightning Network — a layer-2 scaling solution that allows for off-chain transactions.

The Lightning Network creates a P2P payment channel between two parties in a transaction. The channel “allows them to send an unlimited amount of transactions that are nearly instant as well as inexpensive. It acts as its own little ledger for users to pay for even smaller goods and services such as coffee without affecting the Bitcoin network.”

Users of the network lock in a certain amount of Bitcoin in order to create a channel. Once the BTC is locked, recipients can invoice amounts as they need.

To a certain extent, the network is seen as a solution to Bitcoin’s scalability problem, but its adoption has been somewhat slow. The network currently has 87,000 payment channels and 4,570 BTC locked in, worth over $111 million, compared to the 19.1 million BTC in circulation, the market capitalization of which is over $460 billion.

Despite its slow adoption, the network has the potential to outcompete existing payment solutions.

Lightning Network’s transaction throughput 

Payments giants like Visa and Mastercard are used to process payments worldwide. Mastercard’s network is estimated to process up to 5,000 transactions per second, making it far superior to Bitcoin’s seven per second.

Visa’s transaction throughput is even more impressive, being able to process up to 24,000 transactions per second. In a recent interview, Visa chief financial officer Vasant Prabhu said that the network could, in theory, handle up to 65,000 transactions per second.

The Lightning Network goes much further, however, processing up to 1 million transactions per second, making it the most efficient payment system in the world in terms of transaction throughput.

Cointelegraph reporter Joseph Hall does an impromptu test of the Lightning Network versus fiat contactless payments.

Speaking to Cointelegraph, Ovidiu Chirodea, CEO of Romanian cryptocurrency exchange Coinzix, noted that the network marks the next phase in the evolution of money. Per Chirodea, first, there was gold, which was a store of value but wasn’t a convenient medium of exchange, with fiat currency following up as a convenient medium of exchange.

Recent: Tornado Cash saga highlights legal issues affecting the crypto market

Bitcoin, Chirodea said, was an evolutionary step that created a new store of value, with the Lightning Network serving as a platform for it to also become a medium of exchange:

“Visa is charging businesses around 3% to process payments, so I think the Lighting Network is a game changer. Companies will increase their revenue by using it, and that’s not something that you can ignore.”

He noted, however, that the network’s scalability “isn’t so great,” as users need to open a channel with each party and tie up BTC on it, which affects their liquidity. Per his words, tying up liquidity can be avoided by “using other routes and other payment channels,” but the solution “isn’t very scalable, as payments channels keep opening and closing.”

Thomas Perfumo, head of business operations and strategy at crypto exchange Kraken, told Cointelegraph that since the firm launched Lightning Network support in April 2022, it has “steadily increased network capacity” to the point that it’s now the fifth-largest node on the Lightning Network:

“We currently have over 800 open channels that can facilitate upward of 18 billion satoshis worth of payments. Clients are routinely funding their accounts via the Lightning Network on a daily basis.”

Perfumo added that the exchange sees the Lightning Network as “essential for the creation of a permissionless payment system that will ultimately help accelerate the adoption of cryptocurrencies worldwide.”

While the Lightning Network’s advantages in terms of transaction throughput are now clear, it has some notable downsides.

Firstly, opening up a Lightning wallet and funding it may not be as easy or as ingrained as opening a bank account and using a debit card.

Furthermore, funding a Lightning Network wallet requires users to send BTC from a traditional Bitcoin wallet, and creating a payment channel involves locking up funds.

Once funds are locked into a payment channel, they can freely transact, but the funds can only be recovered after that channel is closed. Moreover, offline transaction scams are possible, as one party may close a channel when the other is offline to try to steal funds. While third-party services may mitigate the risk, it keeps some from entering the network.

Privacy, ease of use and censorship-resistance

Keeping these disadvantages in mind, Max Rothman, head of crypto and digital assets at global payment processor Checkout.com, told Cointelegraph that being able to use cryptocurrencies to exchange goods and services “is only effective when crypto can seamlessly exchange hands.”

The Lightning Network being peer-to-peer, Rothman added, puts the responsibility for the transactions process on both merchants and customers. On an institutional level, “This can be challenging and resource-intensive to administer in-house without a trusted partner to manage thousands or millions of cross-currency transactions.”

Rothman said that solutions like the one used by Checkout.com, which rely on partner companies like Visa to offer on-ramps that allow for crypto-to-fiat conversions, are that “bridge that offers a more seamless translation experience between Web2 and Web3.”

Onboarding the next million or billion people to crypto “requires guidance, support and bespoke solutions that work for every level of payment needs and acknowledge the current payments environment in which we operate,” he stated.

Speaking to Cointelegraph, Bruce Fenton, a board member at the Bitcoin Foundation and a candidate for the United States Senate in New Hampshire, said the Lightning Network “enables Bitcoin to do more transactions” while being “more decentralized and censorship-resistant than centralized companies or most other chains.”

When asked about the pros and cons of using the Lightning Network over solutions from companies like Visa, Fenton dismissed Visa as “entirely centralized,” which means it can “be stopped or censored.” While centralization may be a concern on the Lightning Network for some, he said that it does not affect the Bitcoin blockchain itself and added:

“It’s mostly about what money you are building on and for. For those who believe in Bitcoin as the superior money, LN is the most well-known scaling solution.”

Chad Barraford, technical lead at decentralized liquidity protocol THORChain, told Cointelegraph that when checking out at online stores, the Lightning Network enables a “cash” option, in which “there is no other party participating, no exorbitant fees and substantial privacy benefits.” 

He said that the network is “not solely motivated by the best interests of shareholders or board members” but serves its participants’ interests as a public good, adding:

“Visa is a financial institution that inherently seeks profit and control and is at the behest of governments. The Lightning Network is purely a public good. It only exists to provide a fundamental and critical service for every person on the planet in need of access to financial services.”

The Lightning Network’s adoption and success are “tightly coupled with the Bitcoin network itself,” Barraford stated. He believes that as the world sees BTC less as a speculative asset and more “like a currency to purchase items,” then inflationary pressures “will push more and more people to the Lightning Network.”

While the comparison against networks like that of Visa or Mastercard is clear from these answers, it’s worth pointing out that some of these arguments apply to other solutions such as PayPal, which can be forced to freeze customers’ assets or charge higher fees, for example.

Blockchain technology has been developing over time to the point that other blockchains are also able to compete with Visa’s transaction throughput without seeking to profit from it.

What about other chains?

Speaking to Cointelegraph, Fenton hinted that the Lightning Network stands out as “more decentralized and censorship-resistant” than most other blockchains.

Decred co-founder and project lead Jake Yocom-Piatt built on that idea, telling Cointelegraph that other blockchains are unable to match the Lightning Network’s qualities.

Yocom-Piatt claimed that the high-throughput blockchain Solana, with a theoretical throughput of 710,000 transactions per second, is a “centralized, noncustodial blockchain that requires its validating nodes run in datacenters on high-end hardware.” Comparing Bitcoin, Solana and Decred itself, he said:

“Of these three, Lightning Network is the most decentralized, sovereign and most aligned with the original ethos of the cryptocurrency space. Solana sacrifices most of its decentralization via its onerous validating node requirements, but at least it does not appear to be able to censor users and merchants arbitrarily.”

Whatever the future holds, it’s clear that innovation in the cryptocurrency space is increasing transaction throughput. Whether users will end up choosing to sacrifice privacy and immutability for more convenience remains to be seen.

Recent: Metaverse promises: Future of Web3 or just a market gimmick?

As it stands, more convenient solutions are available. It’s now easier to use layer-1 blockchains for payments via centralized entities that allow crypto assets to be converted to fiat currencies at the point of sale.

For the Lightning Network to gain a wider audience, more services are likely going to have to support it. Leading exchanges like Coinbase, Binance and FTX haven’t followed the footsteps of other exchanges in embracing the network, hindering its growth. As the network relies on having more payment channels to keep routing transactions, other networks and centralized payment providers are likely to stay ahead.

Interlay launches trustless BTC stablecoin bridge on Polkadot

InterBTC operates as a BTC-backed stablecoin, secured by a decentralized network of overcollateralized vaults, which according to Interlay, resembles MakerDAO’s DAI token.

Interlay, a London-based blockchain firm, launched a Bitcoin (BTC)-based cross-chain bridge on Polkadot (DOT). Named interBTC (iBTC), the bridge allows the use of Bitcoin on non-native blockchains for decentralized finance (DeFi), cross-chain transfers and nonfungible tokens (NFTs), among others.

interBTC operates as a BTC-backed stablecoin, secured by a decentralized network of overcollateralized vaults, which according to Interlay, resembles MakerDAO’s DAI token, a stablecoin on the Ethereum blockchain.

The iBTC vaults use mixed-asset collateral to insure BTC reserves, making iBTC redeemable 1:1 with BTC over the Bitcoin blockchain. As a preventive measure during unforeseen vault failure, the collateral is programmed to get slashed and reimburse the BTC depositors. Sharing the thought process behind the initiative, Interlay co-founder and CEO Alexei Zamyatin stated:

“Bitcoin is the driving force behind global crypto adoption, while Polkadot, Ethereum & co. is where technological innovation is happening. With interBTC, we combine the best of both worlds while preserving the trustless nature of Bitcoin.”

Interlay’s announcement also highlighted Ethereum co-founder and Polkadot inventor Gavin Wood’s vision of creating a fully decentralized Bitcoin bridge on Polkadot, which was made possible by interBTC. Acala and Moonbeam will be the first DeFi hubs to host iBTC’s debut, which will be supported by a $1 million liquidity program offered by the Interlay network treasury and partner projects.

The roadmap for iBTC involves being available on other major DeFi networks, including Ethereum, Cosmos, Solana and Avalanche.

Related: DeFi market has room for growth in Korea: 1inch co-founder — KBW 2022

Echoing Interlay’s interest in serving the DeFi and other crypto markets, DeFi aggregator 1inch Network eyes geographical expansion in newer jurisdictions. Speaking to Cointelegraph, DeFi aggregator 1inch Network co-founder Sergej Kunz revealed plans to expand its reach in Asia.

Kunz disclosed that 1inch is actively looking to partner with Asia-based Web3 companies despite the small DeFi market in Korea and Asia, adding that:

“Here, there are a lot of people who like gaming and a lot of things like that, so I think the DeFi market can grow a lot in South Korea.”

1inch’s primary use case as a decentralized exchange (DEX) aggregator involves identifying pools with the largest liquidity, lowest slippage and cheapest cryptocurrency exchange rates.

Buterin: Layer-2 scaling will make crypto payments ‘make sense’ again

“It’s a vision that has been, I think, forgotten a little bit and I think one of the reasons why it has been forgotten is basically because it got priced out of the market,” Vitalik Buterin said.

Ethereum co-founder Vitalik Buterin has argued that crypto payments will once again “make sense,” as transaction costs will soon fall to fractions of a cent due to layer-2 rollups.

The Cointelegraph team currently on the ground at Korea Blockchain Week (KBW) quoted Buterin as stating that the final hurdle to getting transactions down to fractions of a cent at scale is blockchain data compression. 

He pointed to “solid work happening” with rollups at the moment such as Optimism’s layer-2 scaling solution for Ethereum, which has worked to get the size and cost of data in blockchain transactions down by introducing zero byte compression:

“So today with roll ups, transaction fees are generally somewhere between $0.25, sometimes $0.10, and in the future with roll ups with all of the improvements to efficiency that I talked about. The transaction costs could go down to $0.05, or even maybe as low as $0.02. So much cheaper, much more affordable, and a complete game changer.”

Despite primarily functioning as a speculative store of value, Buterin emphasized the key use case of Bitcoin (BTC) presented in its white paper from 2008 was to provide a “peer-to-peer electronic cash system” that was cheaper than traditional payment methods.

While that was true up until 2013, according to Buterin, however, this became no longer the case in 2018 when adoption increased and blockchain transactions became too expensive.

“It’s a vision that has been, I think, forgotten a little bit and I think one of the reasons why it has been forgotten is basically because it got priced out of the market,” he said.

In the Ethereum co-founder’s view, BTC and other assets will soon be able to provide this use case once again as scaling solutions — such as the Lightning Network in the case of BTC — gradually bring the costs down to fractions of a cent.

Crypto payment use cases

Buterin outlined a couple of different areas that cheap crypto transactions will be particularly important. Firstly he pointed to “lower income countries or places where the existing financial system is not very effective,” as it will give citizens access to vital payments structure over the internet, something which is already adopted despite the cost of international remittances.

Related: 60 million NFTs could be minted in a single transaction: StarkWare founder

Secondly, he noted that in the context of Ethereum, cheap crypto transactions will also help ramp up adoption for non-financial applications such as domain name system (DNS) servers, humanity proof-of-attendance protocols and Web3 account management services:

“You need to actually send a transaction to create a DNS name, you need to actually send the transaction to recover your account, you need to actually send a transaction to meet some of these adaptations. If doing each of those operations costs like $11, then people are not going into it.”

“Scalability isn’t just like some boring thing where you just need like cost numbers go down scalability, I think actually enables and unlocks entirely new classes of applications,” he added.

European Central Bank bets on CBDCs over BTC for cross-border payments

ECB’s interest in identifying the best cross-border payment solution stems from the fact that it serves as the central bank of the 19 European Union countries which have adopted the euro.

A recent study conducted by the European Central Bank (ECB) on identifying the ultimate cross-border payment medium crowned central bank digital currencies (CBDCs) as the winner against competitors, including banking, Bitcoin (BTC) and stablecoins, among others.

ECB’s interest in identifying the best cross-border payment solution stems from the fact that it serves as the central bank of the 19 European Union countries which have adopted the euro. The study, “Towards The Holy Grail of Cross-border Payments,” referred to Bitcoin as the most prominent unbacked crypto asset.

EBC’s opinion of Bitcoin as a bad cross-border payment system boils down to the settlement mechanism of the highly volatile asset, adding that:

“Since the settlement in the Bitcoin network occurs only around every ten minutes, valuation effects are already materializing at the moment of settlement, making Bitcoin payments actually more complicated.”

While the study highlighted Bitcoin’s inherent scaling and speed issues, it failed to consider the timely upgrades — Taproot and Lightning Network — that improve the network performance, concluding that “The underlying technology (and in particular its ‘proof-of-work’ layer) is inherently expensive and wasteful.”

On the other hand, the ECB recognized CBDCs as a better fit for cross-border payments owing to greater compatibility with forex exchange (FX) conversions. Two major advantages highlighted in this regard are the preservation of monetary sovereignty and the ease of instant payments via intermediaries such as central banks.

Related: Australian central bank governor favors private sector crypto technology

Contradicting the ECB’s reliance on CBDCs, Australian central bank Governor Phillip Lowe believed that a private solution “is going to be better” for cryptocurrency as long as risks are mitigated through regulation.

Mitigating risks related to crypto adoption can be fended off by strong regulations and state backing, stated Lowe, adding:

“If these tokens are going to be used widely by the community, they are going to need to be backed by the state or regulated just as we regulate bank deposits.”

In Lowe’s view, private companies are “better than the central bank at innovating” the best features for cryptocurrency.

‘I have Bitcoin for the benefit of my kids,’ says Gibraltar MP

In an interview with Cointelegraph, MP Isola detailed Gibraltar’s crypto regulatory landscape and his interest in Bitcoin.

Located in Europe, on the southern tip of Spain, the British Overseas Territory of Gibraltar is a bubbling hotbed of cryptocurrency adoption. 

In an interview with Cointelegraph, Albert Isola, Minister for Digital and Financial Services for Her Majesty’s Government of Gibraltar, explained the territory’s approach to crypto and shed some light on his own investment interests. 

Isola played a pivotal role in shepherding Gibraltar’s purpose-built distributed ledger technology (DLT) regulatory framework. However, he’s also a Bitcoiner.

Isola (left) in front of a picture of the Gibraltar peninsula, known as “The Rock.”

Speaking from the Ministerial offices in Gibraltar, he told Joe Hall “I do have Bitcoin.” He continued:

“I’m not at the stage yet where it’s something that I’d use on a regular basis, it’s more about buying some for the benefit of my kids in the years to come. I don’t touch it.”

While spending Bitcoin (BTC) at one of the Costa Coffee’s that now accept Bitcoin in Gibraltar might not be his thing, he explained that adoption of Bitcoin is going to increase, “as more and more jurisdictions begin to regulate it:”

“I’m not at the stage yet where it’s something that I’d use on a regular basis, it’s more about buying some for the benefit of my kids in the years to come. I don’t touch it.”

Gibraltar is an appealing regulatory jurisdiction for crypto companies. Since 2018, when distributed ledger technology (DLT) legislation came into force, more and more companies have considered the European territory. Obi Nwosu, co-founder and CEO of Fedi, told Cointelegraph, “In the realms of regulated jurisdictions, Gibraltar has always been the most interesting.” He brought Coinfloor (now CoinCorner) to Gibraltar four years ago, following the 2018 regulations.

Xapo, a Bitcoin-based private bank recently chose to open its international branch in Gibraltar. Its CEO Wences Casares is known as “Patient Zero” after orange-pilling Silicon Valley executives, while the Xapo offices are carved out of Gibraltar’s ancient military defenses. Moorish fortifications dating back to 711— the oldest ramparts in Gibraltar — now defend the office wine cellar.

The door to Xapo’s wine cellar. The walls are 1,300 years old. 

Indeed, despite a small population of 35,000, the territory packs a punch in the crypto space. Crypto companies such as Damex and Tap.global have or had a presence in the tiny land area. Plus, Mexican exchange Bitso partnered with Gibraltar late last year to digitize government services.

Regulation is “not a joke — it’s partner style,” Xapo chief technology officer Anouska Streets told Cointelegraph. Indeed, in recent months Gibraltar rolled out regulations to combat market abuse. Isola reinforced the point:

“If they [DLT companies] are not prepared to meet the standards of regulation and quality that we aspire to, they will not be licensed.”

The government used the same stringent yet partnership-first process for the gaming space in 2014. Now around 75% of the United Kingdom’s online gaming is done from Gibraltar, from around 15 businesses, Isola reported.

Isola also led gaming and commerce activities on The Rock. 

Related: Andorra green lights Bitcoin and blockchain with Digital Assets Act

2018 was the last Bitcoin and cryptocurrency space bear market in which the DLT regulation was fleshed out, and in the ensuing bull market of 2020 and 2021, Gibraltar reaped the rewards. In the 2022 bear market, or “down time,” as Isola delicately describes it, businesses in Gibraltar are “very well placed to take advantage of the upside and at the same time manage themselves in the downtime:”

“I think our DLT firms are well placed to ride the storms and then take advantage of the upside as and when it comes.”

While Bitcoin-backed businesses benefit from Gibraltar’s approach to regulation, in light of recent Bitcoin bear market rallies, Isola might be right in wishing to hold onto his Bitcoin for the next generation.

Cointelegraph visited Gibraltar to conduct the video interview which will contribute to Cointelegraph’s media coverage on Youtube. Subscribe here.

The Costa’ Bitcoin on the rise: Major chains give Gibraltar a BTC boost

Major franchises in Gibraltar including Costa Coffee, Card Factory and Hotel Chocolat now accept Bitcoin over the Lightning Network or on-chain.

“But you can’t buy a coffee with Bitcoin,” the Bitcoin (BTC) critics chanted. Gibraltar, a tiny British Overseas Territory in Europe just blew a hole in that FUD as popular coffee chain Costa Coffee now accepts Bitcoin over Lightning. 

Hotel Chocolat, Card Factory and the Gibraltar bakery also accept Bitcoin as a currency in the British Overseas Territory. The well-known franchises take advantage of Bitcoin’s Lightning Network (LN) to accept customers’ money. The LN is ideal for microtransaction cappuccinos, postcard payments or ice cream investments as reporter Joe Hall found out during a Gibraltar shopping spree.

Lightning-enabled Bitcoin merchants in Gibralatar. Source: CoinCorner

Payments are instant, frictionless and charge merchants less than the typical Mastercard or Visa payment rails. Neil Walker, managing director at Sandpiper GI — the group managing the retail franchises — told Cointelegraph that when using a Lightning-enabled card, “It’s no different to using a contactless credit card.”

“It is just as quick you can tap and pay contactless credit cards, you can tap and pay lightning, scan a QR code. And whilst I haven’t timed it, I reckon it’s almost exactly the same speed.”

CoinCorner, a Bitcoin exchange on the Isle of Man, partnered with Sandpiper GI, to help in equipping merchants with Bitcoin Lightning point of sale (PoS) devices.

Walker shared that even for Bitcoin naysayers, the ease with which customers and merchants can transact is a no-brainer. He told Cointelegraph, “whether you believe in Bitcoin or not, you can use the lightning network to cut your transaction costs and to pay via mobile.” Given that it’s a neutral payment rail, he said that customers can traverse currencies easily:

“For a long time, the idea of paying with bitcoin seemed alien to both businesses and individuals, but with the launch of The Bolt Card and the ability to “tap and pay” via lightning, the user experience is quick, easy and familiar to everyone.”

Gibraltar welcomes 8 million tourists onto the rock per year, from countries including the United States, Canada, South Africa and the United Kingdom. Plus, Walker estimates that roughly 15,000 cross-border workers cross over from Spain to work in Gibraltar on a daily basis. Gibraltar uses the Gibraltar pound while Spain uses the euro, so currency conversion, remittance and tourism could be strong drivers for adopting a global, borderless currency.

To pay for a coffee in Gibraltar, customers can now scan a QR code or simply tap to pay using an NFC-enabled Bitcoin Lightning card. The most popular payment choice among Satoshi spenders is the Bolt Card, a CoinCorner innovation. Molly Spiers, head of marketing at CoinCorner told Cointelegraph that the “Bolt Card has been a driving factor for Bitcoin adoption.”

Bitcoin adoption in British Overseas Territories is booming, boosted by the ease of tap-and-go payments. Over on the Isle of Man, an island whose population doubles Gibraltar’s 35,000, Bitcoin adoption “has exploded over the last 6 months,” Spiers told Cointelegraph. “We’ve gone from around five businesses accepting Bitcoin, to now nearly 10x that!”

Related: Busking on Bitcoin: How Lightning Network outperforms Ethereum for tipping

While the Isle of Man has made itself the mantle, “Bitcoin Island,” Walker quips that Gibraltar could be called “Bitcoin Rock.” Indeed, the household names of Costa Coffee and Hotel Chocolat join a growing list of merchants that accept Bitcoin in Gibraltar. Essardas Luxury, for example, has accepted Bitcoin since early 2021, while smaller independent shops accept Bitcoin and sometimes cryptocurrencies including stablecoins upon request.

Packed your Bitcoin? A BTC holiday in Costa Rica goes fiat free

A Bitcoiner in Costa Rica had a “win-win” experience when he went on holiday and only spent Satoshis (Bitcoin) while traveling along the pacific coast.

Passport, sunglasses, beach towel and Bitcoin (BTC)? A BTC enthusiast on vacation demonstrated that the world’s largest cryptocurrency could soon become a holiday essential. Eugenio, a Costa Rican Bitcoin maximalist, paid his way on holiday with just Bitcoin in his wallet during a long weekend on Costa Rica’s Pacific coast.

A hotspot for Bitcoin adoption and real-life whale spotting, the towns of Uvita, Dominical and Ojochal are home to Bitcoin Jungle, a Bitcoin-beach-inspired project, as well as a budding community of Bitcoin-friendly merchants. Eugenio documented his entire Bitcoin holiday to the destination on Twitter. He told Cointelegraph, “The only fiat I had to use was filling the tank [of the car] before departing.”

Eugenio explained that he wanted to support the adoption and to show that anyone can do the same, in a convenient and fun way, “using Lightning Network seamlessly with no payment processors or banks involved:”

“I wanted to be able to pay for my little sister’s gelato while I was at the beach, for example.”

Eugenio paid for more than his sister’s ice cream: he paid for pizzas, coffees, steaks and even a trip to the market for kombucha with Bitcoin.

Eugenio at the market. Source: Eugenio

Reportedly, merchants asked, “would you like to pay with Lightning or on-chain?” On-chain transactions take on average 10 minutes to confirm, are slow, and sometimes costly. Lightning transactions are near-instant, near-free and are a “win-win for me and for the merchants,” Eugenio explained:

“It is extremely convenient, Bitcoin is money. You can use it to spend and can use it to save, you can do both in an easy way without the fees and hurdles embedded in the legacy system, plus you can always buy back the sats with the fiat you were going to use in the first place.”

The Lightning Network is quietly catching on, and examples of its adoption slowly spread like roots reaching across the globe. From British families to Senegalese surfers, the appetite for transactions over Lightning means more and more Bitcoin is used on the layer-2 platforms.

Related: Andorra green lights Bitcoin and blockchain with Digital Assets Act

Eugenio shares some advice for those reluctant to use the LN or event to visit Costa Rica. A proud Tico (Costa Rican local), he suggests, “Don’t overthink it. The place is stunning, safe, full of nature and adventure. Use the Bitcoin Jungle Business map for guidance and a Lightning Wallet.”

Costa Rica’s pacific coast showing places accepting Bitcoin. Source: Bitcoinjungle

The place is adopting Bitcoin “organically,” and some of the locals have taken pride in accepting Bitcoin, Eugenio told Cointelegraph.

As per the above map, there are a growing number of merchants across Costa Rica accepting Bitcoin “with a smile.” With the summer holidays in full swing, Bitcoin wallets might be on packing lists around the world, alongside passports, sunglasses and sunblock.

Satoshi milkshake experiment shows kids can HODL Bitcoin too

The famous Stanford Marshmallow Experiment takes the orange pill during a study of 25 school kids on the Isle of Man.

A Bitcoin (BTC) experiment on the Isle of Man involving the Lightning Network, 25 schoolchildren and the promise of a milkshake has yielded interesting results. 

At Willaston School on the Isle of Man (a British Crown Dependency nestled between the United Kingdom and Ireland), 25 6-year-old students, one teacher and one teaching assistant participated in the light-hearted Bitcoin study.

Location of the Isle of Man, including Bitcoin B signs for merchants that accept Bitcoin. Source: Bitcoinevents.co.uk

MSW, a data analyst at CoinCorner, told Cointelegraph that he visited the school to discuss job opportunities and to inspire the kids, discussing his own career path, which spans nuclear reactor study, data analytics and now, Bitcoin. Inevitably, the talk delved into the Lightning Network and CoinCorner’s new creation, the Lightning-enabled Bolt Card. 

“I talked a bit about Bitcoin, went through the Freddo index — how the price of a Freddo is exploding — then showed them the pound money supply over time and then asked them what they knew about Bitcoin.”

A familiar character in most Brits’ childhoods, the Freddo is a humble chocolate bar shaped like a frog. When introduced to greengrocers’ shelves at the turn of the millennium, a Freddo cost just 10p ($0.13). In 2022, Freddo costs a whopping 27p ($0.32), as shown by the following index:

Freddo chocolate bar price analysis. Source: vouchercloud.com

Despite their young ages of 10 or 11, the kids knew of Bitcoin and some of its properties. One bright spark came up with the 21 million hard cap and overall, the classroom’s sentiment toward Bitcoin was positive. At one point, MSW was even asked if buying nonfungible tokens (NFTs) is a good idea. He set them right before gifting each pupil a Bolt Card loaded with £5 credit (21,554 Satoshis or $6).

The Bolt Card is a first-of-its-kind Lightning Network-enabled card that allows near-instant payments at merchants accepting BTC. The Lightning Lunch story demonstrates how it works in detail.

MSW included an important caveat as he gifted the Bolt Card to the kids. “I sort of posed it as do you want to hodl or do you want to spend?” Having highlighted the deflationary, number go-up technology that enshrouds Bitcoin, MSM also showed the class that they could spend their Satoshis as money. Gourmet Shakes, a Bitcoin-friendly milkshake shack was a mouthwatering proposition.

One of the slide’s from MSM’s presentation. Source: MSW

MSW knew full well that the Bitcoin trial was reminiscent of the Stanford Marshmallow Experiment, a pop psychology trial from 1972. In short, the experiment attempted to understand delayed gratification in kids by offering the choice between an immediate reward or a greater prize if the children waited a period of time. The reward was either a marshmallow (hence the trial’s name) or a pretzel.

The “Isle of Man Satoshi Milkshake Experiment”—which maybe doesn’t quite have the same ring to it—yielded intriguing results. Of the 27 participants, just five people have spent their Satoshis, meaning 22 are Bitcoin HODLers.

In addition, as the experiment took place on May 29, the £5 ($5.97) of Bitcoin is now worth around £3.70 ($4.42)at the time of writing. If they want to spend their Bitcoin on a £3 milkshake, they need to act now!

MSW and the class holding the Bolt Card. Source: Willaston.sch

MSW jokes that, unfortunately, the kids are too young to have a CoinCorner account. But the experiment is worthwhile in terms of promoting Bitcoin adoption and demonstrating that spending Bitcoin is easy. Plus, it ties into a growing subcategory of Bitcoin culture, from Bitcoin children’s books to educational tools for kids to understand sound money.

Related: The UK ‘Bitcoin Adventure’ shows BTC is a family affair

The Isle of Man is fast becoming a leading European Bitcoin destination. Around 40 businesses now accept Bitcoin on the island of 85,000 people, Molly Spiers CoinCorner’s head of marketing and communications told Cointelegraph:

“We’re on a mission to make it [Isle of Man] a Bitcoin Island–have people come over and live on a Bitcoin Standard. Hotels and accommodation are ones we’re missing at the moment though.”

As for the milkshake experiment, MSM suggested that it’d be worthwhile to take a trip to see the schoolchildren before the end of this year to see how they’re HODLing, and to demonstrate how to sweep the Bitcoin from the card if they so wish.

Binance aims to become a super app with Splyt crypto partnership

The partnership with the “super app enabler” will allow users to pay for taxi services and food deliveries with crypto using Binance Pay.

The world’s largest cryptocurrency exchange, Binance has partnered with Splyt, a “super app enabler,” to bring payment options to the Binance application. Payment options made for Splyt services include cryptocurrency. 

When live, the integration will allow Binance users to pay for ridehailing services, but “also bikesharing, scooters, airport transfers, public transport and even food delivery,” a Splyt spokesperson told Cointelegraph.

As per usual, Binance CEO Changpeng Zhao, better known as “CZ,” helped to break the news on Twitter:

The news comes as some relief to Binance, which suffered issues related to “stuck transactions” on Bitcoin (BTC) withdrawals on Monday. The problem was resolved eight hours later.

A Splyt spokesperson told Cointelegraph that it would be the “first partnership in the cryptocurrency space” and faced with perilous price action with Bitcoin sub $25,000, “Splyt is enthusiastic about its development.”

“Increasingly, users are turning to their crypto wallets to pay for everyday services. […] Fully integrating everyday services as an obvious next step for crypto wallets.”

For Binance, it’s no secret they’re keen to get a foothold in the crypto payments space. For CZ, payments and app integrations are meant to up the omnipresent Binance brand awareness. Since the world has gradually reopened following the depths of the COVI-19 pandemic, CZ has undertaken a world tour, pitching crypto and Binance Pay to countries and investors all around the world.

Related: Binance Australia CEO: Regulations will establish higher standards in crypto

The report says that Binance is already used by 90 million users in over 150 countries worldwide. For Splyt, the partnership opens the door to a broad customer base:

“The other perspective is equally important: mobility and other on-demand services can dramatically increase acceptance and transaction volumes, by being available through crypto platforms, who together have hundreds of millions of users.”

Critically, as companies such as BlockFi, Gemini and most recently, Coinbase report staff reductions, the news is further evidence that Binance is doubling down into the bear market. Another feather to its cap, Binance continues to expand operations and roll out capital expenditure.