Coinbase Introduces Lightning Network for Faster Bitcoin Transactions
Coinbase, the leading US-based cryptocurrency exchange, is introducing support for the Lightning Network starting today.
This integration will offer users a faster and more cost-effective method for sending, receiving, or paying with Bitcoin directly from their accounts.
Previously, Bitcoin transactions on Coinbase were processed on-chain, resulting in wait times of 10 minutes to two hours and high fees during network congestion periods.
The Lightning Network, launched in 2017, operates as a Layer 2 protocol built atop the Bitcoin blockchain. It addresses scalability concerns by enabling near-instant, low-fee transactions off-chain through bi-directional payment channels without immediate settlement on the base layer.
Fees on the Lightning Network consist of a flat rate base fee as low as one satoshi and a liquidity provider fee as a percentage of the payment value. At launch, Coinbase will impose a 0.1% processing fee on Lightning transactions for sends only, with a maximum withdrawal limit of $2,000.
READ MORE: Marathon Digital Chooses Zodia Custody for Bitcoin Storage Services:
The integration significantly reduces the cost of sending Bitcoin globally, making it 20 times cheaper than the average 2% fee on credit card transactions and a fraction of the cost of wire transfers.
Coinbase partnered with Lightning Network infrastructure firm Lightspark for the integration, led by CEO and co-founder David Marcus, known for his previous roles at PayPal and Meta.
Lightning Network adoption has witnessed significant growth, with nearly 5,000 bitcoins ($311 million) in total capacity. However, capacity in bitcoin terms has declined by 12.9% from its peak in July 2023, coinciding with Bitcoin’s price increase.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
