The largest franchise in the world, Subway, is testing out the Lightning Network layer-2 Bitcoin payments solution and receiving encouraging results in Berlin, Germany.
No, itâs not Groundhog Day. Subway is accepting Bitcoin (BTC), again â but this time itâs using the fast, nearly free Bitcoin Lightning Network.
Kicking off the 7-day #usingbitcoin week with Lunch at Subway, Chausseestrasse in Berlin!
50% off when paying with #bitcoin
#spendyourbitcoin pic.twitter.com/f81kdMOnEQ— felix (@felixbillert) October 19, 2022
The worldâs largest franchise by number of restaurants is trialing Bitcoin payments at three Subways in Germanyâs capital, Berlin. Subway first experimented with Bitcoin almost 13 years ago in Moscow, Russia.Â
Over the past few months, Daniel Hinze, the Berlin Subway franchise owner, recorded over 120 Bitcoin transactions. In an interview with Cointelegraph, Hinze explained his desire âto help Bitcoin become money.â
âFive years ago, I started to deal with cryptocurrencies; and in the last two years, I have dealt very intensively with the topic of Bitcoin. With that in mind, Iâve decided that [Bitcoin] could be the better money system.â
Bitcoin is not a popular means of exchange in Europe, despite the efforts of merchants, retailers and even Lightning-enabled conferences. Hinze has encouraged Bitcoin payments by offering a 10% discount on all footlongs, meatball marinaras and sucookies paid for with BTC.
Lunch with #usingbitcoin
at Subway in Berlin.
Also got 50% off. đ pic.twitter.com/yZkZ6osO9D— Rumpel_BTC (@BtcRumpel) October 19, 2022
To kick off the campaign, Hinze offered a 50% discount on all Bitcoin payments for one week:
âAround the week, there was, of course, extremely high demand. Our three restaurants were frequently visited by people who liked to pay with Bitcoin.â
German-speaking social media was buoyed by Subway buys as the hashtag #usingBitcoin took over. Hinze partnered with Lipa, a Swiss-based Bitcoin company, to enable an easy-to-use point-of-sale solution.
Bastien Feder, CEO of Lipa, told Cointelegraph that its mission is to make Bitcoin âbasically irresistible to use because Bitcoin is currency.â Lipa kitted out the Subways with merchant devices that allow customers to quickly scan a Lightning-enabled QR code that allows for fast, frictionless, low-cost payments.
Lipa charges merchants 1% for the service, as opposed to Visa or Mastercard payment rails, which charge double or more. Feder explained:
âItâs 2.5% to 4% depending on the contract from the merchant. If itâs a business card, thereâs 0.5% on top of that. [âŠ] And if itâs a foreign business credit card, you pay up to 7%, and you donât know until the end of the month.â
The experience of paying over the LN differs greatly from when Subway franchises first accepted Bitcoin payments in 2014. Before the arrival of the LN, customers would have to wait for around for several minutes.
Miners would mint the next block on the blockchain, with the transaction confirmed by Bitcoin nodes around the world. The process was inconvenient for retail payments due to the wait time as well as the sometimes high fees. With the LN, customers enjoy faster settlement times than Visa or Mastercard and lower fees thanks to a peer-to-peer network of payments.
RACE OF THE RAILS ââïž
Bitcoin #Lightning payments vs #fiat contactless payments at the #Gibraltar Bakery.
ÂŁ2.20 loaded up on both PoS.
WHO WINS?? âĄïž âĄïž
âŠ@CoinCornerâ© âŠ@CoinCornerMollyâ© pic.twitter.com/b3ezy7FIeq
— Joe Nakamoto (@JoeNakamoto) July 25, 2022
Nonetheless, due to the fact that Bitcoin has for most of its history been a speculative vehicle â sparing a few use cases for purchasing â encouraging Bitcoiners to spend BTC can be a challenge.
Nonetheless, retail examples are popping up, such as in Berlin or San Salvador. Nicolas Burtey, CEO of Galoy Money, told Cointelegraph that the adoption of Bitcoin in El Salvador was the tipping point for the Lightning Network. He joked that the Bitcoin Law âshould have actually been called the Lightning Law!â
Related:Â McDonaldâs, pizza and coffee paid in Bitcoin: The Plan B for crypto payments
Lipa and Hinze expect a steady increase in demand for Bitcoin payments. Feder told Cointelegraph that itâs due in large part because of the âexponentially rising Bitcoin community in Germany, in Switzerland, basically all over the world.â
Indeed, the LN is enabling communities keen to trade, from Senegal to Guatemala and Switzerland. Hinze told Cointelegraph that for the moment, the Subway restaurant only accepts the worldâs most recognizable currency, as he and his business partners âfirmly believe in Bitcoin.â