Coinbase Launches Bitcoin Lightning Network
Coinbase, the largest US crypto exchange by trading volume, has officially added support for Lightning Network, a layer 2 solution that aims to enable faster and cheaper Bitcoin transactions.
The distribution, which begins today, follows the exchange’s announcement seven months ago that it would accept the protocol. Lightning Network It is designed to make Bitcoin more convenient by allowing near-instantaneous, low-cost payments, as opposed to traditional on-chain means, which are often slower and more costly.
User Advantages of Lightning Network
Before integration, Bitcoin transactions Transactions on Coinbase are processed only on-chain, which can take approximately 10 minutes to two hours. As a result, high fees were charged during periods when the network was busy. Lightning Network runs on the Bitcoin blockchain and uses bi-directional payment channels to process transactions off-chain, achieving instant transaction speeds with minimal fees.
Coinbase’s protocol expert Viktor Bunin believes new integration will increase of Bitcoin Worldwide availability and usability is a major advancement in the cryptocurrency ecosystem.We are excited to announce this @Coinbase distributes support for #Bitcoin Lightning Network powered by Lightspark
Coinbase customers can instantly send, receive or pay Bitcoin via Lightning directly from their Coinbase account. Try it yourself… pic.twitter.com/bfxA5PMHmN
— Lightspark (@lightspark) 30 April 2024
For payments on the Lightning Network, Coinbase has implemented a small 0.1% fee for transfers made within seconds. Initial withdrawal limits are set at $2,000 with a fee cap of $2 per transaction. These actions are carried out to achieve a fairly successful payout rate, for which some adjustments can be made based on feedback and network liquidity.
Coinbase Partnership with Lightspark
To enable this transition, Coinbase teamed up with Lightspark, a company focused on Lightning Network infrastructure, and CEO David Marcus, known for his previous roles at PayPal and Meta. This partnership highlights that Lightspark is focused on improving channel liquidity management and routing success, while Coinbase is working on improving security and user experience.
Marcus emphasizes that this partnership is very critical because it enables a large number of users across the country to enjoy fast and cheaper Bitcoin transactions.
Prospects and Industry Status
Despite inclusive integration, coinbase It has no immediate plans to adopt the Lightning Network in its wallet or other services, but will instead allow critical evaluation of its performance and adoption rate. The approach is consistent with the larger industry movement, as other major exchanges such as bitfinex and Binance have already adopted Lightning support.
Coinbase’s adoption of Lightning lags slightly behind some competing apps; this is a conscious choice, and it is partly a result of the need to observe. layer 2 protocol maturity and adoption.
Looking at broader usage, the growth of the Lightning Network has been quite significant; It currently holds almost 5000 Bitcoins in its capacity. However, this number is lower than previous peaks, which are affected by the volatility of Bitcoin prices. As the usability of the network continues to be realized, adoption is also expected to increase, supported by ongoing improvements and increasing user confidence in layer 2 solutions.
Also read: Tron Founder Justin Sun Shares His Views on Ethereum Repurchase
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Kelvin is a distinguished author specializing in crypto and finance, with a bachelor’s degree in Actuarial Science. Known for her sharp analysis and insightful content, she is fluent in English and specializes in comprehensive research and on-time delivery.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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