Buying Amazon gift cards with Litecoin/Lightning

Charlie Lee has been busy shopping on Amazon via Lightning. We also cover his appearance at the recent Litecoin summit in San Fransisco

Creator of Litecoin Charlie Lee tweeted out last week that he had been using a combination of Litecoin and the Lightning network to “instantly” buy Amazon gift cards.

It’s only been a few weeks since Lee spoke at the first Litecoin summit, held in San Francisco. He talked about “Litecoin being silver to Bitcoin’s gold” and cited many network comparisons of why Litecoin has and will continue to act as a great test net for the Bitcoin network.

“Litecoin has 34x less market cap than Bitcoin today, however, the network hardware cost of miners is only 10x less with $1.3 billion for Bitcoin vs $140 million for Litecoin”. Litecoin mining hardware runs a different hashing algorithm called scrypt, instead of Bitcoins Sha-256. The difference in profitability equates to being, 45% more profitable to mine for Bitcoin vs Litecoin per kWh of electricity.

Litecoin has a network size where economic incentives very much exist for bad actors to attack. A characteristic most agree is lacking on the real Bitcoin testnet.

Lee also repeated a regular story at the summit, defending his “skin in the game”. Even though he timed the top of the market to sell all his Litecoin in December 2017. He justified this by saying he did so in order to have enough to “retire” and work full time on Litecoin. This shrewd decision to drop the ‘conflict of interest’ tag can only be a positive move for this project in the longer run.

Making bets with Roger Ver

Roger Ver and Lee recently met at the Blockchain Cruise and made a bet that will be settled in 18 months’ time: would Lightning network have 1,000 merchants accepting it as payment? (there are only a handful today). The loser has to do an embarrassing YouTube video in the other’s merchandise.

I wonder how many ‘merchants’ Amazon has under it today accepting their gift cards, maybe this already counts as a win for Lee. The truth is that even Bitcoin Cash can run on top of the Lightning network if someone wanted to deploy it. Today through segwit, Litecoin and Bitcoin can easily be used today to open and close lightning channels. Once inside an open channel, you can make unlimited transactions that confirm instantly for basically free.

State of the Lighting network

According to the Lighting network tracker at 1ml.com, the network capacity today is 113 Bitcoin ($0.75 Million) and there are currently 12,000 open channels connected to watch interact together with this live visualisation.

Lee told Ver that the Lightning network represented a true P2P value transfer network, between lightning nodes. This compares to the broadcast style network of Bitcoin today. Competition is hot in the Layer 2 space but Lightning is a deployment that can’t be ignored in terms of cost, speed, open access and a very devoted Bitcoin (or Litecoin) community behind it.

 

 

 

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