Coinbase hasn’t forgotten about lightning – and has hired a company led by a payments industry veteran to make it happen.
Coinbase, the largest crypto exchange in the United States, has selected the company that will spearhead the implementation of Bitcoin’s lightning network at the exchange.
That partner is Lightspark – a lightning infrastructure provider led by PayPal co-founder David Marcus.
Lightning Is Coming To Coinbase
Per an announcement from Lightspark on Wednesday, their technology will give Coinbase customers access to “instant” and “cheaper” Bitcoin transfers and will lead to more lightning-related collabs with Coinbase down the line.
The lightning network is one of Bitcoin’s most popular “layer two” networks, allowing users to complete transactions instantly instead of waiting on the network to settle transfers in roughly ten-minute batches.
It also avoids fees that plague the main Bitcoin chain, which prices out small transfers during times of peak network demand.
Lightning has pressing technical limitations that can make it more difficult to use than a standard Bitcoin wallet. Some of those include liquidity requirements to receive large transactions, and receiving payments when one’s node is offline.
Lightspark says its services remove most of the complexity involved with reliably sending and receiving lightning transfers.
“Lightspark Predict, an AI-based smart engine, optimizes liquidity requirements and routing in real-time to reach the highest transaction success rates and finality times across the network,” the firm stated.
Lightspark is broadly focused on turning lightning into a “universal protocol for money on the internet” by allowing fiat currencies to move along Bitcoin-based rails. Contrary to many Bitcoin bulls, Lightspark CEO David Marcus has claimed that BTC won’t receive wide adoption as a means of payment.
Following Rival Exchanges On Lightning
While Coinbase will control the keys to its lightning wallet, Lightspark will manage the node used by the exchange.
“Lighting up all Coinbase touchpoints with Lightning will profoundly impact the overall network usage at a time when it’s most needed, given the rising price of Bitcoin and Bitcoin L1 fees,” the firm added.
Coinbase first announced plans to integrate lightning in August, but said finding the best way to do so was a “non-trivial” matter. At the time, Block CEO Jack Dorsey accused Coinbase of ignoring Bitcoin by neglecting the layer 2 solution.
Other major exchanges including Kraken and Binance have already integrated the lightning network. The latter fast-tracked the network’s implementation after facing withdrawal issues due to network traffic from Bitcoin Ordinals in May 2023.