- Coinbase CEO Brian Armstrong discloses that the company could integrate Bitcoin Lightning Network in the future.
- LN is supported by several crypto firms including Kraken, Bitfinex, BitStamp, and OKEx.
Coinbase CEO Brian Armstrong has disclosed that the company is seriously considering integrating the Lightning Network (LN) into its platform. This was announced after a tweet by a user identified as “Bitcoin advocate Wicked” questioned the company’s lack of public comments on the scaling solution.
According to Armstrong, his tweets auto-delete after some months, hence, the reason for the lack of public comments. He, however, did not give any timeline for the integration. The scalability issue of Bitcoin has been a huge concern and the introduction of the Lightning Network is meant to address the challenges.
The LN is the most popular scaling solution for Bitcoin with its fast transaction speed and lower cost. Crypto exchanges including Kraken, Bitfinex, BitStamp, and OKEx already provide support for LN solutions. Arcane research disclosed in the first quarter of 2022 that LN facilitated Lightning facilitated $20–30M in monthly payments. That was a four-times year-on-year increase.
Armstrong’s comment has already been lauded by some crypto stakeholders including MicroStrategy’s founder Michael Saylor. Bitcoin enthusiast Derek Ross also believes that it would be interesting to add LN support for deposits and withdrawals. However, others think it could take too long to implement.
Blog post by Coinbase on LN
Last year, Coinbase published a blog post about the Bitcoin Lightning Network and pointed out some significant hurdles. It was stated that there is a lack of developer tooling, onboarding challenges, technical hurdles, and compliance and regulatory issues.
Developer tooling still needs to be built out to enable more user-friendly applications. With most still treating BTC as an investment, we’re yet to see broad demand to use it for payments (use of Lightning rails for fiat payments remains a compelling opportunity). Despite progress from infrastructure companies, Lightning is still cumbersome for new users and merchants. Additionally, onboarding low-income users in developing countries remains a major challenge to fulfilling the promise of Lightning remittances.
Coinbase is facing some regulatory challenges as the US Securities and Exchange Commission has threatened to sue the company if it launches its proposed Lend program. Integrating the Lightning Network could maintain its competitiveness in the market with faster and cheaper transactions.
Twitter is already working with the network as it enables users to send and receive tips via LN. Lightning Network-compatible payments platform called Strike enables Twitter’s millions of monthly users to experience instant and free Bitcoin payments. El-Savaldor’s Chivo wallet is lightning compatible and allows smooth cross-border payments.
The Coinbase blog post, however, clarified that the article should not be construed as an indication that the company plans to add support for LN.
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With that said, it’s hard not to be encouraged by the growth that the Lightning Network is showing — particularly over the past six months. It’s noteworthy that this growth is coming in a bear market, where Bitcoin fees are relatively low. In a future bull market, we could see Lightning activity spike as fees on the base chain rise, sending users looking for cheaper ways to transact.
Considering that this post was published last year, Armstrong’s comment indicates that the company is changing its position.
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