The recent surge in Bitcoin (BTC) transaction fees has prompted one of the largest crypto exchanges to upgrade to the Bitcoin Lightning Network. Binance has announced that it is working on “enabling BTC Lightning Network withdrawals, which will help in such situations”, following a second halt in withdrawals.
To prevent a similar recurrence in the future, our fees have been adjusted. We will continue to monitor on-chain activity and adjust accordingly if needed.
Our team has also been working on enabling BTC Lightning Network withdrawals, which will help in such situations.
— Binance (@binance) May 8, 2023
The Lightning Network (LN), a federated system for cheap, near-instant payments built atop Bitcoin, is unaffected when the Bitcoin mempool is busy. Several large crypto exchanges have embraced it, including Bitfinex, River Financial, OKX, Kraken and CoinCorner. The LN would theoretically allow users to withdraw and send Bitcoin immediately from wallets, regardless of a congested Bitcoin blockchain.
Fees on Bitcoin are rising, and there are still many Bitcoin (to fiat) exchanges that haven’t adopted Lightning deposits and withdrawals
— Sam Wouters (@SDWouters) May 8, 2023
Coinbase, the largest crypto exchange in the United States, is also considering using the LN. After announcing he would integrate the LN soon, CEO Brian Armstrong sent Cointelegraph reporter Joe Hall $100 over the Lightning Network. European Bitcoin exchanges such as Relai and Pocket Bitcoin have welcomed the LN due to its potential to offer faster, cheaper Bitcoin transactions.
Nevertheless, as the LN is a relatively new solution in the crypto space, payment failure can occur. While the network is growing and scaling organically, more liquidity may help it scale faster. Paolo Ardoino, CTO of Bitfinex, confirmed that Bitfinex node is the most interconnected node on the entire Lightning Network, providing liquidity to most of the other nodes, which makes the chances of failure extremely low.
Large exchanges, such as Gemini, KuCoin and Bybit, have not yet announced implementing the LN. Ardoino tweeted in response to high fees that users should ask their crypto exchange to integrate the LN. Binance and Coinbase are on board and announcing plans to follow suit.
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