Coinbase, the largest exchange in the United States and one of the largest globally, says it is intent on incorporating Lightning Network, a layer-2 payment protocol for Bitcoin, in response to users’ demand for quicker and more cost-effective Bitcoin transactions.
Coinbase Dominates the United States with Over 76% Market Share, Says Latest @coingecko Report
The rest of the US market share is as follows:
* Binance US – 8.3%
* https://t.co/Ti3Lx1VXP1 – 6%
* Kraken – 5.4%
* Gemini – 4.1%Approximately 3 out of every 4 American crypto… pic.twitter.com/Adad3fAR9E
— BitKE (@BitcoinKE) April 20, 2023
The cost of using Bitcoin’s Lightning Network is notably lower compared to traditional payment networks like Mastercard and Visa, according to recent data. Indeed, the median fee rate, or the cost of sending value across the Lightning Network, is 0.0029% – 1,000 times cheaper than that of Mastercard or Visa payment processors.
Friends, I'm happy to say that I'm leading up this effort. DM me if you'd like to grab some time to chat Lightning support at @Coinbase.
Particularly keen to get insights on lift to add support, UX flows, open source tooling, service providers, and edge cases. Thanks! https://t.co/WFwG1it6uh
— Viktor Bunin 🛡️ (@ViktorBunin) August 2, 2023
The CEO of Coinbase, Brian Armstrong, has affirmed his faith in Bitcoin, terming it as the the most important asset in crypto, despite comments from several personalities like Jack Dorsey of The Block who questioned the company’s commitment to Bitcoin.
We’re looking into how to best add Lightning. It’s non-trivial, but I think worth doing. I’m all for payments taking off in Bitcoin.
Not sure why you think we’re ignoring Bitcoin – we’ve onboarded more people to Bitcoin than probably any company in the world.
Let’s build it… https://t.co/9dFGYd6XZt
— Brian Armstrong 🛡️ (@brian_armstrong) August 2, 2023
The move by Coinbase comes on the heels of Binance, the world’s largest exchange, deciding to integrate Lightning network. In July 2023, Binance revealed that it had successfully implemented Bitcoin Lightning Network integration for both BTC withdrawals and deposits.
Finally!@binance Exchange Integrates the Lightning Network for Bitcoin Withdrawals and Deposits
In order to utilize this newly integrated feature, Binance users are required to choose "BTC-Lightning" as their network when initiating deposits or withdrawals of Bitcoin on the… pic.twitter.com/Bt9nMtcZD5
— BitKE (@BitcoinKE) July 21, 2023
Binance highlighted several advantages for its users post integration:
- By enabling most transactions to be processed off-chain, the Bitcoin Lightning Network alleviates congestion on the Bitcoin blockchain, allowing for a higher number of transactions per second
- Bitcoin Lightning Network transactions are near-instantaneous as they don’t require confirmation by miners. Payments can be settled within seconds or even milliseconds
- Transactions on the Bitcoin Lightning Network typically have significantly lower fees compared to Bitcoin network transactions. This makes micro-transactions economically viable
- The Bitcoin Lightning Network doesn’t reveal information about individual transactions on the blockchain, which could protect users’ privacy
Binance first revealed its intention to enable Lightning withdrawals back in May 2023 which coincided with a period of increased congestion on the Bitcoin network. This congestion prompted Binance to temporarily halt BTC withdrawals to ensure the smooth processing of transactions.
Before the recent moves, these exchanges had shown no inclination to embrace the layer-2 solution. This reluctance was partly due to community members arguing that integrating the Lightning Network provided exchanges with fewer revenue incentives.
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