Binance Has Officially Completed The Integration Of Lightning Network
In a move to expedite Bitcoin transactions and save users on fees, Binance, the world’s largest cryptocurrency exchange, has pulled off a major integration feat. They’ve officially embraced the ultra-fast Lightning Network (LN) for Bitcoin deposits and withdrawals, as confirmed in a blog statement on July 17.
Now, traders on the platform can tap into the Lightning Network to handle their Bitcoin moves. You’ll spot a “LIGHTNING” label among the various options for deposits and withdrawals, like BNB Smart Chain, Bitcoin, BNB Beacon Chain, BTC (SegWit), and Ethereum ERC-20.
Inspiration for this integration came in May, when Binance had to temporarily halt Bitcoin withdrawals due to persistent network congestion. ‘Ordinals,’ a protocol for minting NFTs on the Bitcoin network, were wreaking havoc, causing transaction rates to skyrocket.
But despite the setback, Binance wasn’t backing down from the challenge. They confirmed that they were developing up a way to embrace the Lightning Network after announcing the activation of some associated nodes in the following month.
Lightning Network Layer 2 Solution
The Lightning Network is a second-layer scaling solution designed to address the scalability and transaction speed issues of the Bitcoin blockchain. Bitcoin, while revolutionary as a decentralized digital currency, has faced challenges with high transaction fees and slower confirmation times as its popularity and usage have grown.
The network operates by allowing users to set up a payment channel by creating a multi-signature wallet on the blockchain. They can then transact between themselves, updating the channel balance without involving the main chain. Once they’re done with their series of transactions, they can close the channel, and the final channel balance is recorded on the blockchain.
Since transactions on the Lightning Network occur off-chain, they are practically instant and come with significantly lower fees compared to traditional on-chain Bitcoin transactions. This scalability solution allows for microtransactions and enhances the overall speed and efficiency of the Bitcoin Network.
This tech has blossomed over the past year, increasing volume transactions from handling 4,000 bitcoins to 5,000 bitcoins, valued at a staggering $152 million. That is a 25% increase while improving speed of the network.
With that, Binance is joining the ranks of other crypto exchanges that have already adopted this Bitcoin scalability solution, like Bitfinex, OKX, and Kraken.