Coinbase Collaborates With Bitcoin Lightning Network (LN) For Faster And Cheaper Transactions

Coinbase use Lightning Network. (Photo; Doc. Blockchain News)

JAKARTA - Coinbase, one of the largest crypto exchanges in the world, has announced its plans to integrate the Bitcoin Lightning Network (LN) into its infrastructure. This decision was taken after the exchange formed a team to evaluate the feasibility of LN integration.

LN is a layer 2 payment protocol created to increase Bitcoin scalability and enable cheaper and faster Bitcoin transactions. This protocol was first proposed by Joseph Poon and mitigating Dryja in a whitepaper in January 2016. LN works by reducing loads on the Bitcoin network, especially during the high demand period.

Previously, many leading crypto exchanges such as Kraken, Bitfinex, Binance, and even Coinbase, were reluctant to adopt LN. They think that LN integration will not have a significant impact on their income, so it is not attractive to implement.

But the situation changed when Kraken and Binance announced full integration with LN for Bitcoin withdrawal and deposit in 2022. This raises questions about Coinbase who previously ignored LN. Even Block CEO Jack Dorsey and MicroStrategy founder Michael Saylor also publicly questioned Coinbase's decision.

Coinbase CEO Brian Armstrong quickly clarified his position. He stated that they were looking for the best way to integrate the Lightning Network. Although he didn't give a definite schedule, Armstrong insisted that his party supports payments with Bitcoin.

The LN integration process is planned to be led by Protocol Specialist at Coinbase, Viktor Bunin. Armstrong stressed the importance of this integration, calling Bitcoin the most important crypto asset and that Coinbase wants to enable faster and cheaper Bitcoin transactions. However, he also warned that this process would take time and ask for patience from Coinbase platform users.