Lightning network has made substantial progress and a number of merchants are now accepting lightning on their online stores. Most e-commerce websites will show a number of crypto options at checkout namely BTC/Lightning/Altcoins. This creates a confusion among customers on which currency is more appropriate to send for payments. We try to address this below using a simple flowchart

A. Large Payments — Use Bitcoin

Bitcoin is undoubtedly most secure crypto for large payments. It is backed by the largest amount of hash power and is very conservative on software updates/forks. Hardware/Cold wallets support storing large amounts of bitcoin offline. Ability to write seed phrase for HD wallet backup is another important feature that is necessary for secure and easy backup of funds

B. Micro Payments when fee is low —Use Bitcoin

While it is tempting to use lightning for micropayments, there is no need when existing bitcoin network is already less congested and has low fee. For last 6 months, transactions with fee rates of 1statoshi/bytes are going through consistently. You can also save extra fee by using native segwit transactions. To use lightning you need an additional onchain transaction to open channel and then be online to safeguard the funds which is totally unnecessary when BTC itself is working perfectly fine.

C. Micro Payments when fee is high— Use Altcoin

When fee in BTC network is high, should you use Lightning?

Lightning has a problem — security of funds. Your private keys have to be online to protect funds. There is also currently no way to backup your funds and users have reported losing funds.

There are recent developments regarding static channel backups and watchtowers and I am hopeful that things will better . However there is an inherent issue that security wasn’t designed from ground up in lightning. When you question this, there are answers like

Be reckless, lightning is in beta

Contrast this to bitcoin. From day one, you could make a simple private key paper wallet that works. Systems that are not designed with security as focal point are unlikely to get better with time. Adding more layers on top makes the system more complex and vulnerable to hacks

When BTC network fees are high, just swap BTC to altcoins like ETH/BCH that have low confirmation fee and are cheap in value! Atleast you have control of private keys/seed words and need not worry about going offline.

It would actually be way easier to just use a seperate currency well suited to small payments, and flip it on an exchange any time you need. It’s not any harder for me to transfer btc from a wallet, buy any altcoin on an exchange and transfer back to another wallet than it is to open a lightning payment channel.

(Source: Reddit thread)

D. Instant payments for microtransactions — Use Lightning

While ecommerce stores that deliver physical goods can wait for confirmation times, some applications really need instant payments. Paywall to read articles online, gambling sites and sites selling digital goods like pictures/streaming videos are best fit for instant payments.

Lightning is the best bet for instant payments

Payments are really instant because you are trusting the other party via contract and there is no confirmation required. Some other altcoins claim instant payments, however anything that has mining/requires consensus cannot be instant. Miners can simply ignore an unconfirmed tx and put conflicting one in a block