A Ukrainian citizen recently got cash in Poland from Miami, US, via Bitcoin’s Lightning network and a little help from a BTC developer who helped the citizen download and set up a crypto wallet on the phone. The citizen received the amount in Bitcoin in her crypto wallet and was able to withdraw the amount in cash through a Bitcoin ATM, with the whole process taking about three minutes. The process shows how efficiently the Lightning system works for peer-to-peer (P2P) payments and how you can use it for cross-border payments as well.
According to a CNBC report, the Ukrainian citizen downloaded a Bitcoin and Lightning self-custodial crypto wallet app on her phone and generated an invoice as a QR code. Those at CNBC then captured that QR code using scan mode in their own crypto wallet and transferred over 50,000 sats (or Satoshis) with transaction fees that amounted to a negligible amount. The Ukrainian who was at the location of a Bitcoin ATM in southwestern Poland was 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 spontaneously transfer/receive payments and reduce transaction costs by keeping them off the main network. The Lightning Network essentially helps Bitcoin be more useful as a daily currency.
You can only send a minimum amount of Bitcoin in a transaction – about 0.00000546 BTC. At the time of writing, that is about Rs. 17. The Lightning Network allows you to push the boundaries to transact the smallest unit available – 0.00000001 BTC or one Satoshi.
The high costs of routine transactions make sending small amounts on blockchain useless. Although you are in a channel, you are free to transfer a fraction of a Bitcoin for free.
Bitcoin’s Lightning Network provides users with a high degree of confidentiality. While you can look at the blockchain and point out that this transaction opened a channel, you can’t see what’s happening inside. If the participants make their channel private, only they will know about the transactions that are taking place.