Lightning Strikes: Binance, Coinbase Embrace Bitcoin’s Layer-2 Network10. May 2023
• Bitcoin transaction fees have increased, causing Binance and Coinbase to shift towards the Lightning Network.
• The Lightning Network is a federated system for near-instant, low cost payments built on top of Bitcoin.
• Many large exchanges like Bitfinex, Kraken, and CoinCorner have already integrated the LN while Coinbase is warming up to it as well.
Bitcoin Fee Spike Spurs Shift to Lightning Network
The recent surge in Bitcoin (BTC) transaction fees has lit a fire under some of the world’s largest crypto exchanges to upgrade their infrastructure by embracing the Bitcoin Lightning Network (LN). Following a second halt in withdrawals, Binance announced it would work on “enabling BTC Lightning Network withdrawals” which can provide an efficient solution for such situations.
What is the Lightning Network?
The LN is a federated system for cheap, near-instant payments that are built atop of Bitcoin. While congestions in the blockchain will cause delays and costly fees when sending transactions, users that use the LN will be able to send and withdraw BTC almost immediately with significantly lower costs.
Which Exchanges Have Already Integrated the LN?
Several large crypto exchanges have already integrated the LN including Bitfinex, River Financial, OKX, Kraken and Coin Corner. Additionally, Coinbase CEO Brian Armstrong recently sent Cointelegraph reporter Joe Hall $100 over the Lightning Network demonstrating that they too are familiarizing themselves with this layer-2 payment protocol. European based exchanges such as Swiss-based Relai have also welcomed this technology due to its ability to “spend and send BTC as fast and cheaply as possible”.
What Are The Challenges In Implementing The LN?
There are still many crypto exchanges that haven’t adopted lightning deposits or withdrawals yet despite solutions existing that make integration easy for any business. This could be due to technical challenges or simply lack of awareness about this technology which could benefit them greatly if implemented correctly.
The recent increase in Bitcoin transaction fees has caused major crypto exchanges across Europe and North America such as Binance and Coinbase to look into integrating services like the Lightning Network which offer more efficient solutions for sending transactions at lower costs than currently offered by traditional methods on chain transactions.