Key Takeaways:
- Coinbase Integration with Lightning Network: Coinbase has integrated the Lightning Network, offering instant and cheaper Bitcoin transfer options alongside traditional Bitcoin transactions.
- Technical Details and Fees: Users need to generate an invoice to use the Lightning option, with Coinbase charging a minimal fee of 0.1% per transaction.
- Industry Impact and Precedents: The move places Coinbase among other major exchanges like Binance and Kraken that already support the Lightning Network, underscoring its ongoing adoption in the crypto industry.
Coinbase, the world’s largest Bitcoin exchange, has recently introduced instant transfer capabilities through the integration of the layer-2 Lightning Network.
This enhancement allows users to choose between the traditional Bitcoin network and the swifter Lightning Network for their transactions.
JUST IN – Coinbase CEO on integrating the #Bitcoin Lightning Network: "Let's get every transaction under 1 second and 1 cent to bring in the next wave of adoption." 👏
— Bitcoin Magazine (@BitcoinMagazine) April 30, 2024
pic.twitter.com/7Zx6a6KglG
Coinbase now offers support for the Bitcoin Lightning Network, enabling a more efficient option for users transacting in Bitcoin.
With the Lightning Network, users can enjoy significantly faster and cheaper transfers compared to the conventional Bitcoin blockchain.
To initiate a transfer via Lightning, users must provide an invoice—a complex string of characters—which specifies the amount to be transferred.
Transfers via the Lightning Network are typically instantaneous, contrasting sharply with the Bitcoin network’s transaction times, which can vary from 10 minutes to a couple of hours.
This difference is due to the Bitcoin network’s limited transaction processing capacity.
However, it’s important to note that transactions to certain self-custody wallets might face delays or failures due to specific implementations or fee structures, as cautioned by Coinbase on April 30.
Starting today, support for the Lightning Network via @lightspark will begin rolling out.
— Coinbase 🛡️ (@coinbase) April 30, 2024
Enjoy instant, low-cost BTC transfers.
Learn more: https://t.co/6YPiWgIyyf pic.twitter.com/ufOhO7Qe7i
A minimal fee of 0.1% of the transaction amount will be charged by Coinbase for transfers made using this new service.
For this strategic integration, Coinbase partnered with Lightspark, a company led by former PayPal president David Marcus.
Marcus has highlighted this collaboration as a crucial step towards achieving more practical solutions for internet payments.
And… It's live ⚡🚀! Welcome to moving #Bitcoin at the speed of light, @Coinbase! We're so thrilled to be part of this journey with you to bring Lightning to 100s of millions of people in over 100 countries. Big milestone for the entire network and for Bitcoin. Let's go! https://t.co/TpxTIye8G9
— David Marcus (@davidmarcus) April 30, 2024
Lightspark supports the integration by hosting the Lightning node, while Coinbase retains complete control over the Lightning signing keys through a remote-key signing setup.
Coinbase’s move to integrate Lightning is not a sudden decision.
According to Coinbase protocol specialist Viktor Bunin, the exchange began considering the Lightning Network as early as August, although assessments of the network had been ongoing for years.
We took a deep look into Lightning support back in August 2023https://t.co/4HOOSRBobD
— Viktor Bunin 🛡️ (@ViktorBunin) April 30, 2024
Bunin shared, “The key drivers in our decision were the continued growth and adoption of Lightning, maturity of the underlying technology and our goal to get onchain payments down to 1 second and costing 1 cent.”
This integration marks a significant milestone for the cryptocurrency ecosystem.
While Coinbase is a major player in the space, it’s worth noting that several of its competitors, including Binance, Kraken, and Bitfinex, have already adopted the Lightning Network in their operations.
About The Author
Fleming Airunugba, a seasoned Web3 and crypto content expert, leverages his deep understanding of blockchain technology to bring the latest and most impactful news to the crypto community.
With a knack for engaging storytelling and strategic content creation, Fleming is dedicated to educating and inspiring his audience with insightful analysis on cryptocurrencies, NFTs, and the future of digital finance.
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