Coinbase Integrates Bitcoin Lightning Network, Streamlining Speedier, Cheaper Transfers
Summary:
Coinbase has introduced support for the Bitcoin Lightning Network, allowing faster and cheaper Bitcoin transfers. The protocol works by having the recipient generate a character string that signifies the transfer amount. Although most Lightning transactions are instantaneous, Coinbase warns that some might be delayed or fail due to specific fee structures or implementations. A processing fee of 0.1% on the transfer size will be charged by Coinbase. For this integration, Coinbase partnered with Lightspark, a provider of Lightning payment solutions. The integration marks a significant milestone for the platform, which joins other global BTC exchanges such as Binance, Kraken, and Bitfinex.
Coinbase has started offering support for the Bitcoin Lightning Network, thus enabling its users to choose between Lighting and the traditional Bitcoin network for their Bitcoin (BTC) transfers. Employing the Lightning Network - a layer 2 technology - Coinbase's users can now partake in Bitcoin transactions that are not only quicker but also less expensive than those achieved through the regular Bitcoin blockchains. To facilitate a transfer via the Lightning Network, the receiver generates an extensive character string which represents the transfer amount and is recognizable by Coinbase. It's noted, however, that Lightning transfers are dubbed "instant".
Scaling comparison to Bitcoin network transfers, these can take anywhere from 10 minutes to 2 hours, owing to Bitcoin network's restricted transaction processing capacity. Coinbase, however, flags that, despite the instant general promise, Lightning transactions targeting certain self-custody e-wallets may encounter occasional delays or outright fails due to unique implementation schemes or fee arrangements.
For processing Lightning transactions, Coinbase will exact a 0.1% fee based on the transfer size. In the venture of integrating with the Lightning technology, Coinbase collaborated with Lightspark - a provider of Lightning payment solutions helmed by ex-PayPal boss, David Marcus. He referred to the liaison as a strategic milestone in their joint agenda of presenting feasible solutions for online payments. According to Lightspark, remote-key signing is being utilized by Coinbase: a setup where Coinbase solely holds the Lightning signing keys while their Lightning node is managed by Lightspark.
Viktor Bunin, a protocol specialist at Coinbase, mentioned in a blog post that considerations for the Lightning technology commenced in August, but he admitted to Cointelegraph that the network has been under their evaluation for several years. Coinbase decided to hop on board due to Lightning's continued adoption and growth, maturing foundational technology, and their own aim of cutting down the duration and cost of onchain payments down to 1 second and 1 cent, respectively. The integration marked a colossal accomplishment for the ecosystem, stated Bunin.
Coinbase, one of the largest global BTC exchanges, joined the ranks of its competitors like Binance, Kraken, and Bitfinex who already embraced the Lightning technology in July 2023, in 2022, and late 2019 respectively.
Published At
4/30/2024 9:30:00 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.