Binance And Coinbase Are Silent About Bitcoin Lightning: The Community Is Trying To Understand WhyKiana Griffin
The integration of the Bitcoin Lightning Network has begun to gain momentum among cryptocurrency exchanges around the world. However, some of the world’s largest crypto trading platforms seem to be in no hurry to integrate the protocol.
Last week, cryptocurrency trading app Robinhood was another major industry player to announce its Lightning integration. Earlier, such a step was taken by the BitPay cryptocurrency payment system and the Kraken crypto exchange.
Since the main goal of Lightning integration is to reduce the cost of bitcoin (BTC) transactions and speed up transfers over the network, one might wonder which cryptocurrency exchanges have not yet added support for Lightning.
Binance, Coinbase, and FTX Keep Silent About Lightning
Not everyone is happy with the pace of Bitcoin LN adoption. David Cohen , software quality assurance specialist and crypto enthusiast, is frustrated by the lack of progress on Lightning Network integration among major crypto exchanges. He gathered data from official sources, social media submissions, and Lightning researchers such as 1ML and Amboss, only to find out that Binance, Coinbase, and major South Korean cryptocurrency exchange Bithumb are not on the “Lightning exchanges” list.
Despite providing comprehensive information about the Lightning Network on their websites, both Coinbase and Binance declined to comment on their potential Lightning Network integration plans.
FTX, not listed on Cohen’s list, also declined to comment. Last January, FTX stated that it “probably pays more transaction fees than any other entity in the world” on its official Twitter account.
There appear to be many possible reasons why some of the world’s largest crypto exchanges have yet to add Lightning support.
One Redditor suggested that the availability of the Lightning Network would be mainly due to less incentive to hold bitcoin on exchanges like Binance due to the costly withdrawals.
“However, implementing this could be disadvantageous for Binance. I personally want to use the Lightning Network to move all my BTC trading to cold storage,” he said.
According to Cohen, the implementation of Lightning may simply not be a priority for some of the major crypto exchanges, or even conflict with their business plans.
“I believe that Binance is not interested in integrating Lightning Network deposit or withdrawal because it may conflict with their business plans,” Cohen said.
He suggested that Binance might be more interested in promoting the use of its own blockchain networks, including Binance Beacon Chain and Binance Smart Chain, especially for withdrawals.
See Also: Ethereum Merge Looms, Experts Weigh in What To Expect
Some major crypto exchanges are prioritizing support for industry trends like DeFi or NFT over the Lightning Network.
Cohen stressed that Lightning not only allows bitcoin to be moved at a lower cost, but also allows users to store real bitcoins, stating:
“With the Lightning Network, users can transfer funds even for free if they have a direct channel to the exchange and, most importantly, they have real bitcoin instead of a wrapped bitcoin token on the Ethereum virtual machine network.”
The Lightning enthusiast also doesn’t expect other exchanges like Coinbase to integrate Lightning support in the near future, “since the priority seems to be integrating as many altcoins as possible and following market trends,” he said. Cohen added that support for non-fungible tokens (NFTs) appears to be a higher priority for Coinbase than Lightning, citing the company’s NFT initiative officially released last year. The expert’s remarks echo some similar comments in the community.
The Lightning Network Becomes Less Advanced And More Necessary
According to some members of the community, Lightning is still a cutting-edge development today, which is why it takes a lot of time and effort for major crypto exchanges to make such improvements.
However, with exchanges like Bitfinex , OKX (formerly OKEx ) and Kraken adding Lightning, “it’s becoming less cutting-edge and more necessary to be competitive,” a spokesperson for the researcher Amboss said.
“The user experience with Lightning is excellent and exchange users will be looking for the easiest way to deposit and withdraw funds from their exchange of choice. […] Lightning support is needed for users who need to make quick transactions,” the representative said.
Launched in March 2018, the Lightning Network is a Bitcoin Layer 2 protocol designed to enable faster and cheaper BTC transactions. Bitfinex is considered the first crypto exchange in the world to add support for Bitcoin Lightning for payments by integrating the protocol in December 2019.
Leave a Reply