Coinbase has revealed that it will integrate the Lightning Network, a layer-2 payment protocol, into its platform.
The decision aims to provide users with a faster and cheaper network for Bitcoin (BTC) transactions. The Lightning Network enables users to interact with Bitcoin (BTC) through a faster interface.
Brian Armstrong, the CEO of Coinbase, said that the Lightning Network is one of the most vital assets in the crypto industry and that the integration will allow its users to enjoy faster transactions.
Lightning Network development
The Lightning Network is a solution that seeks to solve the scalability problems of the Bitcoin network. In the Bitcoin network, every node has to process and verify every transaction, which can be slow and inefficient.
The Lightning Network works as a layer-2 off-chain solution, meaning that transactions occur through a separate network of payment channels connected to the Bitcoin blockchain. The network allows users to send or receive Bitcoin or satoshis (the smallest unit of Bitcoin) with lower fees and faster confirmation times. The more capacity the Lightning Network has, the higher the liquidity, allowing for more significant transactions and quicker payments.
Since its launch in 2018, the Lightning Network has grown in popularity and has been adopted in various regions. It reached a capacity of 4,000 Bitcoin in June, with Gibraltar, the Isle of Man, and El Salvador being notable adopters.
The recent adoption of Bitcoin as a legal tender in El Salvador has helped to scale the Lightning Network. However, the Lightning Network has also faced some challenges from some Bitcoin influencers, who claim it is a failure due to low usage.