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Best Cryptocurrency Exchange Coinbase is rolling out support for the Bitcoin Lightning Network, the company announced Tuesday. Gradually available on its mobile and desktop platforms, Coinbase users will be able to choose between sending Bitcoin using the Bitcoin mainnet or the Lightning Network.
Launched in 2018, the Lightning Network is a layer 2 protocol built on top of the Bitcoin network. The Lighting Network allows users to move BTC between wallets without the need to interact directly with the Bitcoin blockchain.
Coinbase Facilitation of Lightning Network Integration Based in Los Angeles Bright spark. Founded in 2022, the company offers Lightning Network products for businesses.
“We made a few considerations when determining the best way to add lighting support,” said Coinbase protocol specialist Viktor Bunin. Decrypt.
“The first thing is we decided to use a non-custodial integration partner, because when you look at the design of Lightning, it has this optimization component,” Bunin said. “The second thing is, when we think about the division of labor, it makes sense for Coinbase to focus on security, and on user experience, it makes sense to outsource that.”
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Coinbase customers interested in using the Lightning Network can switch between Bitcoin Core and the Lightning Network when they enter the amount of Bitcoin they wish to send. They will then need to include a Lightning “invoice” address, which will be generated by the recipient.
“Customers will interact with Lightning outside of our retail exchange, and it’s a custodial feature, the same way you custodian Bitcoin, ETH and other assets with Coinbase,” Bunin said.
“Customers don’t have to manage a node, manage a channel, or worry about liquidity,” he added. “Coinbase and Lightspark manage all these different aspects, and Coinbase manages the keys and security, as we always do.”
Coinbase, based in San Francisco, had been explore Lightning Network integration since last fall. The most difficult part of integrating the Lightning Network into Coinbase, Bunin recalled, was helping the Coinbase team understand how the technology worked, particularly when it came to managing channels and movement of money. funds.
“It was really crucial to ensure that everyone in the company working on this project had a deep understanding of the Lightning Network, how it works and how it impacts the tasks they are responsible for,” he said. he declares.
Although Coinbase met with different Lightning Network providers, Bunin said Lightspark fit the bill, offering all the features they were looking for.
“We opted for a partner with a proven track record of working with enterprises on large-scale Lightning deployments, and Lightspark met our high bar for security,” Bunin explained. “They are not gatekeepers, as I mentioned, and they have a clear vision for how they can continue to support and improve the lightning ecosystem in the long term.”
He said the integration of the Bitcoin Lightning Network is ultimately about increasing crypto adoption and increasing economic freedom.
“Bitcoin is the most important asset in crypto, and when we think about how we can advance decentralized, permissionless, credibly neutral networks and assets, how can we make assets on these networks come closest to one second, one cent transfers and transactions possible, Lightning just made a lot of sense,” said Bunin “Promoting Bitcoin is something good for Coinbase, good for the industry. and good for the ecosystem, and we are very proud to have the opportunity to do it.”
According to Bunin, although the Lighting Network option is available to customers based in the United States, canadian and New York residents will not be able to take advantage of the Lightning Network feature at this time.
Coinbase, for its part, has been engaged in a legal battle with the United States Securities and Exchange Commission since the agency's inception. investigate Coinbase for allegedly allowing its customers to trade unregistered securities in 2022.
In March, a federal judge ruled that the SEC trial could move forward, saying the regulator's argument against the exchange was plausible, rejecting Coinbase's motion to dismiss.
Seeking to tilt Congress in favor of crypto, Coinbase supported the policy campaigns targeting the 2024 US elections. In February, a Coinbase-backed SuperPAC called Fairshake PAC launched a massive ad campaign targeting the US Senate candidate. Katie Porteran ally of U.S. Senator Elizabeth Warren, a longtime crypto critic.
Editor's note: This story was updated after publication to clarify that Lightning Network support is rolling out gradually, rather than immediately, to all US users.