Coinbase Rolls Out Lightning Network Support for Faster and Cheaper Bitcoin Transactions
Coinbase, the largest U.S. crypto exchange by trading volume, has announced the rollout of support for the Lightning Network starting today. This integration will provide users with a faster and cheaper way to send, receive, or pay with bitcoin directly from their Coinbase account.
Previously, bitcoin transfers on Coinbase were processed on-chain, leading to transaction times of between 10 minutes and two hours, along with high fees during network congestion. The Lightning Network, launched in 2017, is a Layer 2 protocol built on top of the Bitcoin blockchain to address scalability issues by enabling near-instant, low-fee transactions off-chain.
Viktor Bunin, Coinbase’s protocol specialist and Lightning integration lead, expressed excitement about the integration, stating, “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.”
Fees on the Lightning Network are minimal, with a flat rate base fee as low as one satoshi and a liquidity provider fee charged as a percentage of the payment value. At launch, Coinbase users will be limited to withdrawing a maximum of $2,000, with a processing fee of 0.1% for Lightning transactions.
Coinbase claimed that the integration of the Lightning Network will reduce the cost for users to send bitcoin globally by 20 times compared to credit card transactions and significantly lower than wire transfer fees.
The integration with the Lightning Network was made possible through a partnership with Lightspark, a Lightning Network infrastructure firm led by CEO and co-founder David Marcus. Marcus, known for his prior roles at PayPal and Meta, described the collaboration with Coinbase as a significant milestone for Lightning payments.
While there are no immediate plans to integrate Lightning into Coinbase Wallet or other services, the team will monitor the network’s growth and adoption to guide potential expansions in the future.
Coinbase’s integration of the Lightning Network follows similar moves by other major crypto exchanges like Bitfinex, OKX, Kraken, and Binance. The decision to integrate Lightning support was driven by the network’s growth, maturity, and Coinbase’s goal to improve transaction speed and cost efficiency.
Overall, the adoption of the Lightning Network has been steadily increasing, with a total capacity of nearly 5,000 bitcoins. Despite some fluctuations in capacity, the Lightning Network continues to play a significant role in facilitating faster and cheaper bitcoin transactions.
As Coinbase continues to invest in projects within the Bitcoin ecosystem, the integration of the Lightning Network marks a significant step towards enhancing the user experience and expanding the adoption of cryptocurrencies globally.
