Binance Embraces Bitcoin Lightning Network to Enhance Transactions
Binance, the world’s largest cryptocurrency exchange, has made an important announcement on Twitter regarding a significant enhancement that could revolutionize how the platform handles large volumes of transactions in the future.
The crypto behemoth confirmed that it is actively working on enabling the Bitcoin Lightning Network for deposits and withdrawals. Users had noticed the presence of new lightning nodes on the platform in recent days. However, Binance stated that it would take some time for full integration to be completed.
If successfully implemented, Binance will join other major players such as Kraken and OKX, who have already integrated the Lightning Network into their respective platforms.
Significance of the Lightning Network
The Bitcoin blockchain faced unprecedented congestion in May, which prompted Binance to consider implementing the Lightning Network. Interestingly, due to the massive backlog of transactions, Binance had to temporarily halt withdrawals twice within a span of 48 hours.
As Bitcoin’s popularity has grown, network congestion has become a pressing issue. The current network’s design limitations hinder scalability, and the chain has been consistently struggling with transaction throughput.
The Lightning Network is a layer-2 solution (L2) built on top of the Bitcoin blockchain. It addresses the challenges of the base network by introducing off-chain transactions.
In simple terms, these transactions utilize direct channels between users, allowing for multiple transactions to be processed without waiting for blockchain confirmation. Once these payment channels are closed, the transactions are confirmed on the mainnet.
Tough Times for Binance
Binance’s decision to implement the Lightning Network comes at a challenging period when the exchange is facing regulatory hostilities not only in the United States but also in other major markets. The exchange was recently sued by the U.S. SEC over financial irregularities and has encountered difficulties in various European countries.
The negative sentiments have affected the exchange, particularly its American arm, Binance.US. According to CoinGecko, the daily spot trading volume on the exchange has plummeted by 80% since the SEC lawsuit was filed.
At the time of writing, Binance’s native token BNB experienced a 3.89% increase in a 24-hour period, reaching $251.25. This surge could potentially be a response to the parent entity’s adoption of the Lightning Network.
Moreover, the token has shown signs of recovery over the past week due to increased buying pressure, as reported by Santiment.
BSCN is aiming to become the leading media coverage platform around the Binance Smart Chain Ecosystem. With a strong focus towards Content Quality, Decentralized platforms, Hot topics in the market, Informative and education sources and guidance in how to be more aware around unreliable crypto projects.
