Coinbase CEO Brian Armstrong has just confirmed the cryptocurrency exchange will soon integrate Bitcoin’s (BTC) lightning network (LN) which will help to enable cheaper and faster transactions.
On September 13, Armstrong said the integration would help Bitcoin (BTC) to solve its scalability problem and compete against newer crypto projects that process faster and cheaper transactions. The move comes five months after Coinbase first hinted at its willingness to enable support for the layer-2 network.
The team did a great job digging into this, and we've made the decision to integrate Lightning. Bitcoin is the most important asset in crypto and we're excited to do our part to enable faster/cheaper Bitcoin transactions. Will take some time to integrate so please be patient. https://t.co/FneeXkLI25
— Brian Armstrong 🛡️ (@brian_armstrong) September 13, 2023
Coinbase Embraces Bitcoin Lightning Network
He noted the Coinbase team has completed its “digging” into a potential Bitcoin Lightning network integration and will now proceed with its implementation, adding that the integration process would take time and urged users to be patient. He wrote,
“The team did a great job digging into this, and we’ve made the decision to integrate Lightning. Bitcoin is the most important asset in crypto and we’re excited to do our part to enable faster/cheaper Bitcoin transactions. Will take some time to integrate so please be patient.”
The Lightning Network protocol was introduced by Joseph Poon and Thaddeus Dryja in a scalability problem published in January 2016, and pointed to this protocol as the solution to Bitcoin’s scalability problem. The layer-2 solution allows users to enjoy cheap and instant off-chain transactions that eventually settle on Bitcoin’s mainnet.
It uses micropayment channels to scale the blockchain’s capability and handle transactions more efficiently and cheaply. This off-chain approach allows for more transactions to be bundled and takes a considerable load off the Bitcoin network during periods of peak demand.
Lightning Network Use Cases Surge
Over the recent months, a number of cryptocurrency exchanges started dabbling with this technology. On July 17, Binance, the world’s largest crypto exchange announced the completion of Bitcoin LN integration for BTC withdrawals and deposits.
#Binance has completed the integration of Bitcoin ( #BTC ) on the Lightning Network and deposits and withdrawals are now open.
More details here 👇https://t.co/aIofPdtAGY
— Binance (@binance) July 17, 2023
Other major crypto exchanges that have integrated support for the Lightning Network include Kraken, OKX, and Bitfinex, as well as the mobile payment platform Cash App and digital payments firm Strike.
Furthermore, on September 11, former PayPal president David Marcus asserted that the Bitcoin Lightning Network could streamline the intricate procedure of cross-border transfers, emphasizing it will find its primary utility in facilitating international transfers rather than everyday purchases.
"We're trying to turn #Bitcoin into a global payment network. There's no universal protocol for money on the internet that enables value to be transported," says @lightspark CEO @davidmarcus. "Our view is $BTC is not the currency people will use to buy things." pic.twitter.com/3fEBTzHxJS
— Squawk Box (@SquawkCNBC) September 11, 2023
Marcus further described LN as the intermediary real-time, cost-effective, and definitive cash settlement layer. The ex-PayPal exec explained,
“A fraction of a Bitcoin on the Lightning Network can be likened to a small data packet on the internet, specifically designated for transferring value.”
