Binance has started its work on the integration of Bitcoin Lightning Network for deposits and withdrawals. This move is in an effort to improve transaction efficiency and network congestion.
The news, announced in a tweet, said: “Some eagle-eyed users spotted our new lightning nodes recently. Yes – that’s us! However, there’s still more tech work to be done. We’ll update once Lightning is fully integrated.”
On 8 May, Binance had to temporarily close #BTC withdrawals due to a large volume of pending transactions. These transactions were then processed by replacing them with higher transaction fees so that they could get picked up by mining pools. Fees were later adjusted to prevent similar recurrences in the future.
In the weeks before this event, Binance had halted $BTC withdrawals twice, each time for around two hours, citing network congestion and a large chunk of pending transactions. It was then revealed that the team would start on enabling BTC Lightning Network withdrawals, which would effectively help in such situations.
According to the exchange, the withdrawal issues experienced by Binance have caused much concern in the crypto market, contributing to a drop in Bitcoin’s value. A key contributing factor to Binance’s withdrawal issues was identified to be the surge in $BTC gas fees.
The Bitcoin Lightning Network will operate as a second-layer (L2) solution on top of the Bitcoin blockchain. This will efficiently enable quicker transactions and also lower fees without affecting the underlying network.
The Bitcoin Lightning Network has the capacity to support about 1 million transactions per second. As of the week starting from Monday, 19 June, the capacity stood at around $144 million. The same has been observed to be growing steadily over the last one year.
With the promise of the Lightning Network, Binance aims to enhance its platform and provide a better experience for users. The L2 network has already been integrated by its rival exchanges including Kraken and Bitfinex. Therefore, the ongoing integration is vital for Binance in order to maintain its position amongst the industry leaders.
Crypto Regulation, Cryptocurrency