Coinbase eyes Bitcoin Lightning Network for its payments solutions

Leading cryptocurrency exchange Coinbase is considering adding Bitcoin’s Lightning Network to its payment methods as part of its efforts to include more tokens in its payments framework.

In a media interaction on August 2, Coinbase CEO Brian Armstrong stated that the exchange was looking into how the Lightning Network could be integrated with its payment methods. He said the move is “non-trivial” but worth a shot.

Coinbase is among the most popular crypto exchanges and has a global user base. Over time, it has evolved as a trusted source of live cryptocurrency prices. It recently hit the headlines after the US Securities Exchange and Commission filed a lawsuit against the exchange for allegedly not registering as a broker with the regulatory body.

Armstrong had made the statement while replying to a tweet by Block Inc founder Jack Dorsey. Block Inc is a popular blockchain-based financial services company.

The Lightning Network is a Layer 2 solution for Bitcoin that uses micropayment channels between nodes to boost the speed of transactions. These channels pave the way for software providers to lock on-chain assets. The mechanism reduces network congestion by processing transactions separately. 

As on August 2, 2023, the total number of Bitcoin tokens locked on the Lightning Network for payment was around 4,600 BTC tokens – worth around $130 million at current prices.

About the Bitcoin Lightning Network

The Lightning Network is a Layer 2 protocol powered by the Bitcoin blockchain. The protocol has carved a niche for itself by helping developers boost the speed of transactions on the Bitcoin network with the introduction of off-chain transactions. The Lightning Network leverages micropayment channels for scaling the blockchain and processing not just a higher volume of transactions but also with more efficiency. The collective capacity of the Lightning Network also makes it a more cost-effective solution for scaling on the Bitcoin blockchain.

Bitcoin, which is among the Top 10 cryptocurrencies in the world, is a highly-traded token that makes a facility like the Lightning Network a valuable addition to the current DeFi ecosystem. Bitcoin was initially not designed to offer a high degree of scalability. Over time, as its popularity rose, the lack of scalability posed new challenges. To that end, the Lightning Network serves as a cutting-edge feature that can boost the scope and usage of the Bitcoin blockchain.

Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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