Lightning Network Used to Sell Beer at Room77

A Lightning Network (LN) using Bitcoin’s testnet coins (tbtc) has on Saturday successfully performed a real-world transaction at the Room77 bar in Berlin.

Also read: The Lightning Network Alpha Release is Ready for Testing

Room77’s Test

Located in Germany’s ‘Bitcoin city’ of Kreuzberg, Room77 is the first bar/restaurant in Berlin to accept bitcoin for payments. The popular hangout for Bitcoiners has been taking the digital currency directly, with zero confirmations, for several years. On Saturday, Room77’s owner Joerg Platzer announced on Reddit:

Today we have deployed a testnet Lightning node and accept testnet coins via the Lightning Network from a few customers to get a glimpse into the future. And that future looks shining bright!

Making the claim that the Lightning Network is working, he announced that Room77 is “accepting testnet coins tonight for beers if they are being sent via the Lightning Network to our Lightning node”. With Lightning, he explained that transactions arrive in milliseconds instead of the usual seconds, or possibly minutes such as when customers use Coinbase.

“As a merchant, I can tell you that every merchant on the planet wants this stuff”, he claimed, adding that Bitcoin can now “live up to its promises in regards to efficiency, speed, irreversibility and privacy no matter how many people will use it”.

Benefits of Lightning Networks

In his Reddit thread, Platzer listed several more benefits which he believes will be apparent once LNs are deployed on the main Bitcoin network. He mentioned that double-spend attacks, including the infamous replace-by-fee procedure, won’t bother merchants anymore. Malleability attacks, too, would be “a thing of the past”.

He also believes that “massively advanced privacy” for both merchants and customers will become a standard since both parties on a LN can only see the transactions on their own payment channel. Moreover, Platzer praised LNs’ ability to “offer free-of-cost payments to our customers”, due to the extremely low fees charged within already-opened payment channels.

The First Lightning Beer Buyer

The beer’s buyer in this historic transaction was LN developer Olaolu “Roasbeef” Osuntokun, who helped develop the very lnd client used for the beer’s payment. “In this instance we used lnd to make the payment”, Roasbeef told Redditors. “We’ll be releasing a GUI [Graphical User Interface] for lnd pretty soon here, so that’ll open up the gates for less technical users to start messing around with Lightning”.

Some photos were also posted to the Reddit thread previewed the GUI for their LN client, including server and mobile apps.

Roasbeef explained that “even without a GUI released for lnd, we’ve started to see an up-tick in developer activity for those developing applications on top of Lightning”. The coder added that another developer has already created a “slack tip-bot on Lightning”, which behaves like the now-defunct Changetip but exists purely over LN payment channels. Osuntokun noted:

Oh, also there’s another Lightning implementation (eclair) that currently has a GUI. lnd isn’t yet compatible with eclair but I’ll start to test compatibility directly in the coming weeks!

Sizes of LN Transactions Revealed

This testing gave Roasbeef and several other developers at the event a chance to see how LN transactions would behave ‘in the wild,’ in a real food industry setting. One takeaway the developer noted was the small size of the network transactions that were used to open and close lnd channels.

The transaction that funded the payment channel was “comprised of one hop” of the overall payment which Roasbeef sent, he described. It was a total of 257 bytes in size, which is typical for a Bitcoin transaction. In the future, when many Lightning payment channels have been deployed, this initial transaction would not be made at the time of payment, but instead made while setting up the wallet or signing up with other types of service. Afterward, users would keep the transaction open for weeks or years, according to the Lightning Network documentation.

On the other side of the transaction, when closing a payment channel, the size was slightly larger at 335 bytes, “due to spending the multi-sig output”, he explained. Between the two transactions recorded on the blockchain, “high volumes” of payments with “exceptionally low fees” can go back and forth between the two parties as well as the people that they are connected with, the Lightning Network documentation details.

Do you think Platzer is right about how every merchant will want to use LN? Let us know in the comments section below.

Images courtesy of Shutterstock, Yelp, and Joerg Platzer

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