Coinbase completes integration with Bitcoin Lightning Network
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Coinbase has integrated the Bitcoin Lightning Network (LN) into its platform, enabling users to send and receive Bitcoin at a fraction of the cost and time compared to traditional on-chain transactions.
According to Coinbase, their move to integrate with LN comes as a response to the growing demand for more efficient and cost-effective ways to transact with crypto. The integration was done through the exchange’s partnership with Lightspark, a Lightning Network infrastructure provider co-founded by David Marcus, a former PayPal executive.
“Until now, bitcoin transfers on Coinbase were processed onchain which could take anywhere from 10 minutes to 2 hours and could be costly for users. The Lightning Network, built on top of Bitcoin, enables instant off-chain bitcoin transfers at a fraction of the cost,” the exchange said in a blog post.
The Lightning Network is a layer-2 scaling solution built on top of the Bitcoin blockchain that allows for near-instant transactions with significantly lower fees. By integrating this technology, Coinbase aims to address the issues of slow transaction times and high costs that have plagued the global payments system.
In 2022, US consumers paid an estimated $75 billion in credit card transaction fees, with many transactions taking days to clear. The Lightning Network integration on Coinbase offers a solution, with the cost of sending Bitcoin globally being 20 times less than the average 2% charged on credit card transactions and a fraction of the $30 paid for wire transfers.
Prior to this integration, Bitcoin transfers on Coinbase were processed on-chain, which could take anywhere from 10 minutes to 2 hours and could be costly for users. With the Lightning Network, Coinbase customers can now instantly send, receive, or pay with Bitcoin directly from their accounts, without the need for intermediaries or lengthy settlement times.
The Lightning Network has seen steady growth since its launch in 2017, with increasing demand from Coinbase customers. The integration of the Lightning Network is particularly crucial for underbanked and unbanked communities, as it provides a means to access financial services without the high costs and delays associated with traditional banking systems.
According to Messari data, Coinbase leads in the US in terms of reported average 24-hour volume at $2.58 billion. Kraken is next at $926 million, followed by Gemini at $84.74 million.
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Author: Vince Dioquino
