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Coinbase Introduces Support for Bitcoin Lightning Network
In a recent announcement, Coinbase revealed that it will now offer support for the Bitcoin Lightning Network on its platform. This integration enables users to choose between sending Bitcoin via the mainnet or the Lightning Network using both mobile and desktop versions of the exchange.
The Lightning Network: A Brief Overview
The Lightning Network, established in 2018, operates as a layer-2 protocol layered on top of the Bitcoin network. It allows users to transfer BTC between wallets without engaging directly with the Bitcoin blockchain, thus enhancing transaction speed and reducing fees.
Facilitating Coinbase’s incorporation of the Lightning Network is Lightspark, a Los Angeles-based company specializing in Lightning Network products for enterprises. By partnering with a non-custodial integration firm like Lightspark, Coinbase maintains a focus on user security and experience while delegating other operational aspects.
User Experience and Security
According to Coinbase protocol specialist Viktor Bunin, customers can seamlessly transition between utilizing Bitcoin Core and the Lightning Network when sending Bitcoin. This simplifies the process for users, as they only need to provide a Lightning “invoice” address generated by the recipient.
Bunin reassured customers that they don’t need to manage channels, liquidity, or run a node to access the Lightning Network through Coinbase. The exchange takes on the responsibility for key management and security, ensuring a streamlined experience for all parties involved.
Despite facing initial hurdles in comprehending the Lightning Network’s intricacies, the Coinbase team successfully navigated the integration process. Through collaboration with multiple Lightning Network providers, the exchange ultimately selected Lightspark for its reputable track record and commitment to security.
Expanding Crypto Adoption
Integrating the Bitcoin Lightning Network aligns with Coinbase’s mission to foster crypto adoption and enhance economic freedom. By offering faster and cost-effective transactions on Bitcoin, the exchange aims to advance decentralized, permissionless networks and promote the growth of the digital asset ecosystem.
While the Lightning Network functionality is currently accessible to U.S.-based customers, residents of Canada and New York will need to wait for this feature’s availability. Meanwhile, Coinbase continues to navigate a legal dispute with the U.S. Securities and Exchange Commission, underscoring the regulatory challenges in the cryptocurrency space.
In a bid to influence crypto-friendly legislation, Coinbase has supported political campaigns targeting key figures in the 2024 U.S. elections. This strategic advocacy reflects the exchange’s commitment to shaping a favorable regulatory environment for digital assets.
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