Binance and Coinbase are joining other large cryptocurrency exchanges that have integrated the Bitcoin Lightning Network to avoid the recent surge in Bitcoin transaction fees. The Lightning Network is a federated system for cheap, near-instant payments built on top of Bitcoin, which is unaffected by the Bitcoin mempool congestion. Bitfinex, River Financial, OKX, Kraken, and CoinCorner are some of the large cryptocurrency exchanges that have already integrated the Lightning Network, allowing users to withdraw and send Bitcoin immediately from wallets, bypassing the congested Bitcoin blockchain.
Following a second halt in withdrawals due to the recent surge in Bitcoin transaction fees, Binance announced it would enable BTC Lightning Network withdrawals to avoid similar recurrences in the future. Meanwhile, Coinbase’s CEO Brian Armstrong sent $100 over the Lightning Network, demonstrating his familiarity with the layer-2 payments protocol.
While many Bitcoin-to-fiat exchanges are yet to adopt Lightning deposits and withdrawals, Adem Bilican, the CTO of Swiss-based Bitcoin exchange Relai, believes that the Lightning Network is the best solution to make BTC more accessible to users, regardless of on-chain transaction fees. However, given that the LN is a relatively new solution, payment failure can occur. The network is growing and scaling organically, but more liquidity may help the network scale faster. Bitfinex’s CTO Paolo Ardoino suggested that users should ask their crypto exchange to integrate LN to avoid high fees. Gemini, KuCoin, and Bybit are some of the large exchanges that are yet to announce implementing the LN.
