The increasing Bitcoin (BTC) transaction fees have prompted large crypto exchange, Binance, to announce plans to implement the Bitcoin Lightning Network (LN). The move follows two halts in withdrawals, pushing Binance to work on enabling BTC withdrawals through the LN to prevent similar disruptions in the future.
The Lightning Network is a system providing cheap, fast payments built on top of Bitcoin. While the Bitcoin mempool, where transactions gather before confirmations, can get congested, the LN remains unaffected. Big crypto exchanges like Bitfinex, River, OKX, Kraken, and CoinCorner have already adopted the Lightning Network. Through proper implementation, the LN allows quick and easy withdrawal and sending of Bitcoin without having to use the congested Bitcoin blockchain.
Despite rising fees on Bitcoin, several Bitcoin-to-fiat exchanges haven’t yet integrated Lightning deposits and withdrawals. Even though technical hurdles are not the primary reason for the delay, available solutions like @RiverRLS make integration quicker and easier for businesses. The largest crypto exchange in the United States, Coinbase, is gradually warming up to the idea of using the LN. CEO Brian Armstrong even sent $100 over the Lightning Network, indicating a familiarity with the technology. European Bitcoin exchanges are also leaning toward adopting the LN.
As CTO of Swiss-based Bitcoin exchange, Relai, Adem Bilican stated, “We believe that Bitcoin is the best savings technology ever invented…The Lightning Network is the best solution to tackle that, no matter how the on-chain transaction fees look.” Echoing this sentiment, the Swiss Bitcoin exchange, PocketBitcoin, recently announced its plan to “get this Lightning thing started” in response to soaring Bitcoin Basechain fees.
However, the LN is relatively new in the crypto space, and payment failures can still occur while it scales organically. More liquidity may accelerate scaling, as explained by Paolo Ardoino, CTO of Bitfinex: “The Bitfinex node is the most interconnected node on the entire Lightning Network. It is also the biggest, providing liquidity to most of the other nodes. Hence the chances of failure are extremely low.”
While Binance and Coinbase are gradually integrating the LN, other major exchanges like Gemini, KuCoin, and ByBit have yet to announce or consider implementing the technology. As Bitcoin transaction fees continue to rise, the integration of the Lightning Network by major exchanges is becoming increasingly necessary.
Source: Cointelegraph
