Today we’ve added a new payment method to Hodl Hodl: “Bitcoin Lightning Network” and in this post we’re going to explain why we did this and why this might come in handy.
What and why we did
The new payment method is called “Bitcoin Lightning Network” and it’s been added today to the exchange and tied to the payment type “Cryptocurrency” — now anyone can create offers with this payment method.
The reason for adding this method is rather simple: it’s our customers’ request.
How it helps me
When you exchange on-chain bitcoins with the bitcoins on the Lightning Network through Hodl Hodl, the party who is sending Lightning Bitcoins is balancing his channels & increases his inbound liquidity.
This way you get rid of the mess with the inbound liquidity and attempts to increase it.
Also, sometimes, when people want to move the bitcoins from the Lightning Network, they have to close opened channels: you also get rid of this mess with Hodl Hodl.
If we see demand in exchanging on-chain bitcoins with the bitcoins on the Lightning Network, we’ll to implement more advanced solution, stay tuned!
How does it work
- A new contract is created and Hodl Hodl generates a unique multisig escrow address for it.
- Seller deposits on-chain Bitcoin into the escrow directly from the wallet.
- Buyer sends the seller bitcoins via the Lightning Network.
- Seller releases on-chain bitcoins from the multisig escrow directly to the buyer’s wallet.
When you create the offer, you always have to specify the price. We currently don’t have a “BTCLN” currency in the list of currencies you can choose for the offer. We instead advise you to put the exchange rate inside offer description field just in case (1 BTC = 1 BTCLN).
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