Last month, Binance said it was working on implementing Bitcoin Lightning Network (LN) deposits and withdrawals to address network congestion issues. Today, the world’s largest crypto exchange confirmed it was making progress with these efforts, though it said there’s more work to be done.
Binance to Incorporate Lightning Network to Reduce Bitcoin Network Load
Binance is taking steps to implement Bitcoin Lightning Network into its system to streamline user deposits and withdrawals, the leading crypto exchange said on Twitter on Tuesday. Although the company is working to integrate LN, “there’s still more tech work to be done,” Binance said, adding it will provide an update when the network is fully incorporated.
The remarks come several weeks after Binance first announced its plan to enable Bitcoin LN transactions when BTC withdrawals were clogged on the exchange due to a reported overflow of transactions on the world’s biggest blockchain network.
To prevent such situations from happening again, Binance adjusted transaction fees and said it was working on implementing BTC LN withdrawals, which can help reduce the network burden.
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Why is the Lightning Network Important?
The Bitcoin Lightning Network refers to a second-layer protocol built on top of the Bitcoin mainnet chain that aims to address the scalability issues of the original network. It enables faster and cheaper transactions through off-chain channels, reducing congestion and fees.
LN has made Bitcoin an even more practical and efficient payment system for day-to-day transactions thanks to its facilitated micropayments, improved transaction speed, and enhanced overall scalability. As a result, it has also become one of the key drivers of Bitcoin’s adoption.
In February 2023, LN capacity reached a new all-time high of 5,490 BTC or $128 million. This marked a 63% jump from the start of 2022 when capacity stood at 3,350 BTC.
Growing LN capacity – the total number of BTC locked in the network’s payment channels – emphasizes the rapidly-increasing adoption of the layer-2 protocol. Further, LN has also attracted rising interest from businesses and individuals looking to use it for fast and low-cost micropayments and other transactions. In 2022, Jack Dorsey’s Cash App rolled out a feature that lets users receive Bitcoin payments instantly through the LN.
Do you use Lightning Network for Bitcoin transactions? Let us know in the comments below.
The post Binance Confirms Lightning Network Integration for Bitcoin Transactions appeared first on Tokenist.
