Crypto exchange Binance enabled deposits and withdrawals on Bitcoin’s Lightning Network on Monday.
Lightning is now alongside other options including Bitcoin mainnet, BNB Smart Chain and Ethereum.
Lightning serves as a layer-2 scaling solution for Bitcoin. The network is intended to speed up transactions and reduce fees, reminiscent of Ethereum layer-2 protocols like Optimism.
It supports direct payment channels between users, allowing bitcoin (BTC) to be sent off-chain while settling on-chain in batches. This design has presented its own risk profile, with Lightning developers warning users that the software is still under development.
“Most software deployed in the Lightning Network is still considered beta software, meaning it may contain bugs that could lead to irrevocable loss of funds. For most operators, the biggest risks are data loss from power outages, hardware failures and bugs,” per Lightning’s FAQ.
Bitcoin sent over Lightning should appear in seconds, with the network often used for micropayments and real-world transactions. Twitter, for instance, enabled BTC tipping in 2021 via payments app Strike, which uses Lightning.
Binance pledged to integrate Lightning last month but said doing so required further technical work.
Other exchanges such as Bitfinex, Kraken, River Financial and OKX have already integrated Lightning into their platforms. Coinbase CEO Brian Armstrong in April hinted that his platform may do the same but hasn’t yet provided a specific timeline.
Lightning adoption has steadily increased over the past few years, although it hasn’t been without hiccups. There’s about 4,900 BTC ($148.2 million) on the network right now — up from under 1,000 BTC ($30.2 million) in 2020.
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Source: https://blockworks.co/news/bitcoin-lightning-network-binance