In an exciting move toward enhancing the scalability and efficiency of bitcoin transactions, Coinbase CEO Brian Armstrong declared the company’s intent to integrate into the Lightning network. The Lightning network is a second-layer solution built on top of the Bitcoin blockchain that speeds up transactions, making them a lot cheaper and almost instant.
Previous Attempts by Coinbase to Integrate Lightning
Early in August, the business had stated that it was investigating Lightning support. On Wednesday, Armstrong announced on Twitter that this study was complete and Coinbase has “made the decision to integrate Lightning.” However, he did not say how long the integration is likely to take.
The sluggish integration of Lightning by digital asset exchange giants has been the subject of speculative reasoning. According to one argument, customers may be less inclined to maintain their bitcoin on these exchanges if Lightning is made available because of the hefty withdrawal fees imposed on on-chain bitcoin withdrawals.
As a result, the integration would motivate them to regularly move their holdings off exchanges, which might lessen their reliance on the exchanges’ centralized wallets. Technical difficulties, regulatory issues, and the requirement to balance scalability with security are further contributing causes.
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Another argument is that people hold on to their bitcoin rather than trade it, and with low liquidity implementing Lightning hasn’t made much sense.
Lightning Gaining Traction Among Exchanges
The announcement comes after Coinbase released its financial results for the second quarter last month, which were easily above financial analysts’ expectation. Still, Coinbase shares value are currently trading down about 30% from their year-to-date high.
Digital asset exchange giant Binance announced on July 17 that they successfully integrated Lightning payments into their exchange platform.
The breakthrough on Wednesday is just another milestone in the steady march toward the adoption of bitcoin Lightning payments, following in the footsteps of Strike, Jack Dorsey’s Cash App, David Marcus’ Lightspark, and most recently, Binance.