Bitcoin and crypto exchange, Coinbase, has integrated Bitcoin’s Lightning Network, enabling faster and cheaper BTC transactions for its users in the United States.
“Starting today, Coinbase is rolling out support for the Lightning Network enabling instant, low-cost bitcoin transfers. Users will have the option to choose between using Lightning for faster and cheaper bitcoin transactions, or processing their transaction on the traditional Bitcoin network,” Coinbase said in an April 30 2024 post.
Introduced in 2017, the Lightning Network is a Layer 2 protocol built atop the Bitcoin blockchain. It aims to tackle scalability concerns by utilizing bi-directional payment channels. These channels facilitate near-instantaneous, low-cost transactions off-chain, without requiring immediate settlement on the underlying base layer.
Before, Bitcoin transfers on Coinbase were handled on-chain, resulting in transaction times ranging from 10 minutes to two hours. This approach often led to significant fees, especially during periods of network congestion.
According to Coinbase, its Lightning Network integration means the cost for its users to send bitcoin globally was now 20 times lower than the average 2% charged on credit card transactions and a fraction of the $30 paid for wire transfers.
“Growing Bitcoin adoption increases economic freedom in the world. I’m thrilled that our Lightning integration is live to make Bitcoin more useful and accessible worldwide,” Coinbase’s protocol specialist and Lightning integration lead, Viktor Bunin, said in reports.
“Offering faster and cheaper BTC payments through our partnership with Lightspark is another huge milestone for the ecosystem.”
I’m thrilled to announce that Lightning ⚡️ is now live on @Coinbase! I could not be more proud of the team for shipping it so quickly.
Growing Bitcoin adoption increases economic freedom in the world. This is my personal life mission and the mission for all of us at Coinbase. https://t.co/EwBZtTuCKr
— Viktor Bunin 🛡️ (@ViktorBunin) April 30, 2024
Coinbase collaborated with Lightspark, a Lightning Network infrastructure company, for the integration. Lightspark is led by CEO and Co-Founder, David Marcus, recognized for his previous executive positions at PayPal and Meta, which includes oversight of the Facebook Libra cryptocurrency project at Meta.
[VIDEO] Interview with David Marcus, Head of Facebook Libra Cryptocurrency: https://t.co/skxQ10EC9n #Libra @DavidMarcus @Libra_ @Calibra @Facebook
— BitKE (@BitcoinKE) June 19, 2019
Coinbase’s adoption of the Lightning Network follows several of its major cryptocurrency exchange competitors. Bitfinex led the way by providing Lightning Network support in 2019. Subsequently, OKX integrated Lightning support in 2021, followed by Kraken in 2022, and Binance completed the integration in July 2023.
In recent years, the lightning Network has experienced significant growth, with its total capacity currently nearing 5,000 bitcoins, equivalent to approximately $311 million.
Despite its overall growth, the Lightning Network’s capacity in bitcoin terms has declined by 12.9% since reaching a peak of 5,640 bitcoins in July 2023, coinciding with the surge in bitcoin’s price.
Additionally, in U.S. dollar terms, Lightning Network capacity has decreased by 9.6% from its peak of $344.2 million on March 13 2024, as bitcoin approached its most recent all-time high of $73,836.
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