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Crypto Payments Soared To Unprecedented Levels In 2023, CoinGate Report Reveals

The year 2023 witnessed a remarkable surge in crypto payments, signaling a significant milestone in adopting digital currencies for retail and e-commerce transactions. 

According to a recent report by CoinGate, a crypto payment processor firm, the number of crypto payments processed reached staggering heights, showcasing robust growth and diversification in the crypto landscape. 

Massive Surge In Crypto Payments

In 2023, CoinGate processed an astounding 1,294,058 cryptocurrency payments, marking a 39.4% increase compared to the previous record. This exponential growth, equivalent to one payment every 24 seconds, underscores the accelerating pace of crypto adoption. 

Notably, approximately one-third (32.35%) of all transactions processed by CoinGate in the last ten years occurred in 2023, emphasizing the surge in the popularity of digital currencies.

Per the report, integrating Binance Pay wallet into CoinGate’s payment services in March 2023 played a significant role in driving this growth. 

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Binance Pay accounted for 8.2% of all crypto payments in 2023, showcasing a steady increase in usage throughout the year. This upward trend, from 4.5% in March to 13% in December, indicates the growing adoption and usage of Binance Pay as a preferred payment method.

Lightning Network Surges In Popularity

Moreover, CoinGate’s report highlights the increasing maturity and acceptance of the Lightning Network, an essential component of Bitcoin payments. 

In 2023, the Lightning Network facilitated 7.8% of all Bitcoin payments processed by CoinGate, representing a notable increase from previous years. 

Furthermore, the overall number of Lightning Network payments grew by 35.9% compared to the previous year, indicating a growing reliance on this technology. 

However, Bitcoin, long considered the dominant cryptocurrency for payments, saw a decline in its share of total transactions processed by CoinGate. While Bitcoin accounted for 54.8% of all transactions in 2021, its share dropped to 35.6% in 2023. 

Stablecoins, particularly Tether’s USDT, emerged as a popular choice for crypto payments in 2023. The usage of USDT increased from 15.1% in 2022 to an average of 25.4% in 2023, indicating a shift towards stablecoins due to their perceived stability and reliability. 

Alternative Payment Solutions 

According to CoinGate’s report, crypto-friendly merchants experienced remarkable success in 2023, with a significant portion of their sales attributed to cryptocurrency payments. 

Eldorado.gg, a gold and accounts marketplace for gamers, reported crypto payments contributing to 3% of their total sales. IPRoyal, a proxy service provider, saw over 30% of their payments made in cryptocurrencies. 

Hostinger, a web hosting provider, captured nearly one-fourth of all crypto-paying customers, showcasing the effectiveness of alternative payment solutions in catering to diverse customer needs.

Overall, 2023 demonstrated a paradigm shift in the adoption of cryptocurrency payments. The surge in transactions processed by CoinGate, the increasing usage of Binance Pay and the Lightning Network, and the diversification of cryptocurrencies used for payments all point towards a new era of acceptance and trust in digital currencies. 

As crypto-friendly merchants reap the benefits of embracing these payment methods, it becomes evident that cryptocurrency payments offer sales growth, solutions for the unbanked population, and global accessibility. 

With the stage set for further expansion in 2024, the transformative power of cryptocurrency payments continues to reshape the retail and e-commerce landscape.

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Featured image from Shutterstock, chart from TradingView.com 

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Lightspark CEO Outlines The Challenges Of Building On The Bitcoin Lightning Network

The CEO of Lightspark, David Marcus, has come forward to share his experiences on building atop the Bitcoin Lightning Network. Marcus noted the challenges the Lightning Network held for builders, stating that it was incredibly difficult and complex to develop software around the protocol.

The Bitcoin Lightning Network And The Challenges It Holds for Builders

According to the Lightspark CEO, a firm involved in developing payment solutions on the Lightning Network, a layer-2 scaling platform for Bitcoin, the firm decided to build on the network because of the “unique qualities” Bitcoin provides as the underlying network. 

He explained that Lightspark’s objective is to build a cheap, very open, and interoperable protocol for virtual money/payments, and the Lightning Network is designed to be similar to layer 2 ZK-rollup for Bitcoin. 

However, the former president of Paypal and co-creator of Diem noted that building on Lightning and Bitcoin is about five times more difficult than developing on other protocols. This is because the process to create software around the protocol is incredibly difficult and complex to do.

Nevertheless, with these objectives in mind, the platform committed to building on the Bitcoin Lightning Network and to do “Whatever it takes to reach their full potential.” But despite having high hopes about the prospects of the network, Marcus’s recent disclosures on Twitter have shown that building on the network was no easy feat. 

Bitcoin (BTC) price chart from Tradingview.com

Moving Forward Despite Difficulties

According to Marcus, part of the challenges is attributed to the rigidity of Bitcoin and the difficulties involved in altering its structure to contain new code in its base layers to meet the needs of specific solutions. He pointed out that Bitcoin’s layer 1 is particularly rigid and building a new opcode to mainlet was practically not possible. 

However, despite these challenges, Lightspark remains upbeat, and instead of completely abandoning the Lightning Network protocol for other less complex chains, the platform intends to develop a payment solution that would still be applicable “100 years from now.”

The firm also intends to reorganize the process enabling crypto market users to connect to the Lightning Network. Although this will depend on their ability to put in place the necessary peer-to-peer payment channels.

Apart from Lightspark’s CEO, other players in the sector have also recognized the intricacies and general challenges of building software around the Lightning Network. Popular CEO of Binance Changpeng Zhao has previously pointed out that integrating Lightning Network services on Binance was more complex because of the usage of on-demand invoices, which are different from pre-generated addresses. 

Additionally, Fitatjaf, a prominent Bitcoin developer and founder of the decentralized social protocol Nostr, has also offered criticism of the Lightning Network, terming it a pile of complex and ugly hacks.