Coinbase Embraces Lightning Network for Bitcoin Transactions

Coinbase has introduced support for the Bitcoin Lightning Network, giving users the option to choose between Lightning and the regular Bitcoin network when transferring BTC. The Lightning Network, which operates as a layer-2 solution, allows Coinbase customers to make Bitcoin transfers faster and more cost-effective compared to transactions on the Bitcoin blockchain. To utilize the Lightning Network, the recipient sends an invoice with a long string of characters that Coinbase recognizes as the transfer amount. Lightning transfers are almost instant, unlike Bitcoin network transfers that can take anywhere from 10 minutes to 2 hours due to transaction limitations. Coinbase cautioned that sending Lightning transfers to certain self-custody wallets might take longer or fail due to differing implementations or fee structures.

When users send transfers through Coinbase via the Lightning Network, Coinbase will charge a processing fee of 0.1% of the transfer amount for the sender. The integration with the Lightning Network was made possible through a partnership with Lightspark, a payments solution provider led by former PayPal President David Marcus. Marcus described the collaboration as a significant milestone in their joint pursuit of offering practical payment solutions for the internet.

Lightspark clarified on its website that Coinbase utilizes a remote-key signing implementation, where Coinbase holds the Lightning signing keys while Lightspark hosts its Lightning node. According to Coinbase protocol specialist Viktor Bunin, the cryptocurrency exchange began considering Lightning as early as August but had been evaluating the network for years. Their decision to integrate Lightning was driven by the network’s growing popularity and adoption, the maturity of the technology, and their objective of reducing onchain payment time to 1 second at a cost of 1 cent. Bunin expressed excitement at the integration, calling it a significant milestone for the cryptocurrency ecosystem.

Coinbase, which is one of the largest Bitcoin exchanges globally, follows in the footsteps of its competitors who have already added support for the Lightning Network. Binance incorporated Lightning in July 2023, while Kraken and Bitfinex implemented it in 2022 and late 2019, respectively.

7 thoughts on “Coinbase Embraces Lightning Network for Bitcoin Transactions

  1. Woot woot! Coinbase now supports the Lightning Network! Faster Bitcoin transfers are on their way. Thank you, Coinbase, for always striving for excellence.

  2. Finally, Coinbase catches up with its competitors in supporting the Lightning Network! ⚡️ I’m excited to experience faster and more cost-effective Bitcoin transfers. Great job, Coinbase! 🚀💲

  3. This is fantastic news! Coinbase supporting the Lightning Network will make Bitcoin transfers so much faster and cheaper. Thank you, Coinbase!

  4. Lightning-fast Bitcoin transfers are now possible with Coinbase! Thank you, Coinbase, for integrating the Lightning Network and making our lives easier. You’re awesome!

  5. Lightning-fast transfers with Coinbase? Sign me up! ⚡️ This integration is a game-changer and will revolutionize the Bitcoin ecosystem. Thank you, Coinbase! 🙌💲

  6. I’m loving this news! Coinbase supporting the Lightning Network means faster and more cost-effective Bitcoin transfers. Thank you, Coinbase, for thinking ahead!

  7. A measly 0.1% processing fee? Coinbase can do better than that. They’re just thinking about their own profits! 💸

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