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Why Lightning Payments Aren't Clicking for Porn Companies (Just Yet) - CoinDesk

Bitcoin may finally achieve broader traction through the adult entertainment industry in 2020, but the chips aren’t stacked in its favor.

So far, typical sex industry businesses like London’s 23 Paul Street strip club, said in June the venue stopped accepting bitcoin because customers simply weren’t paying with it. But the lightning network, a layer on top of bitcoin used for faster transactions with lower fees, may now be ready to facilitate broader payments for online platforms.

Iterative Capital’s Escher project offers fiat on-ramps to the lightning network, with other projects like Zap offering similar functionality. There are now service providers to feed a fledgling demand for lightning channels.

According to Veronika Mishura, marketing manager at the payment processor CoinGate, her startup processed 1,400 lightning invoices in 2019 for clients like adult industry sites LiveJasmin and CooMeet, with the average payment being worth around 12 euro. A LiveJasmin spokesperson confirmed the site does receive lightning payments for porn, although he declined to specify details.

“We don’t offer payouts in crypto and we don’t track the content per payment method,” he added.

There is certainly room for growth in the adult entertainment industry, as Pornhub famously had trouble paying performers with PayPal in 2019 and now lets performers cash out with Tether instead. ZmnSCPxj, a pseudonymous bitcoin researcher who recently received a grant from Jack Dorsey’s Square Crypto, said he expects privacy-enhancing mixing services to become a more popular part of the lightning economy.

“Improved privacy is always desirable and people will pay for such,” ZmnSCPxj said, adding that channel fees and transaction costs will be “minimal compared to mixer fees.”

Blockstream's lightning expert, Rusty Russell, said in Q1 2020 his team is “working on making our payment paths less predictable, which improves privacy,” along with setups th...

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