Coinbase CEO reacts to Jack Dorsey’s tweet on Bitcoin Lightning
Coinbase CEO Brian Armstrong said the US popular exchange will integrate Lightning Network for payments to help users transact with bitcoin cheaper and faster, years after staying silent on the adoption of the layer-2 payment protocol.
In response to a tweet from Block CEO and founder Jack Dorsey, who asked why the crypto exchange continues to ignore Lightning, Armstrong said they are currently exploring the best approach to incorporate the technology into their platform. Armstrong added that it’s not a straightforward task, but he believes it’s a valuable endeavor.
Nevertheless, Coinbase CEO has not provided any additional details on what a Lightning integration with the exchange would entail, or when users could expect to see it implemented. However, Armstrong’s support of the Lightning Network in his recent tweet has sparked speculation that Coinbase could be considering this technology as a way to improve the user experience amid its plans to expand outside the US.
We’re looking into how to best add Lightning. It’s non-trivial, but I think worth doing. I’m all for payments taking off in Bitcoin.
Not sure why you think we’re ignoring Bitcoin – we’ve onboarded more people to Bitcoin than probably any company in the world.
Let’s build it… https://t.co/9dFGYd6XZt
— Brian Armstrong 🛡️ (@brian_armstrong) August 2, 2023
The Lightning Network is designed to scale the Bitcoin network by enabling users to conduct transactions off-chain, allowing for faster confirmation times and lower fees. As one of the largest and most widely-used cryptocurrency exchanges in the world, Coinbase’s adoption of the Lightning Network could have a significant impact on the broader adoption and use of this technology.
The Bitcoin Lightning Network has already been gaining traction among cryptocurrency exchanges worldwide, but not all major players were rushing to integrate the protocol. While some top platforms, such as Binance, BitPay and Kraken have already adopted the technology, Coinbase is taking a more cautious approach.
There was speculation on why some of these exchanges have been slow to integrate the Lightning Network. One theory suggests that Lightning’s availability could lead to fewer incentives for users to keep their Bitcoin on these exchanges due to the high cost of withdrawals. As such, the integration would encourage them to frequently transfer their holdings to cold storage, which could reduce their reliance on the exchanges’ centralized wallets. Other possible factors include technical challenges, regulatory concerns, and the need to balance scalability with security.
Lightning Network was introduced in 2018 and has seen increased usage among bitcoin holders in recent years. That trend has risen at a faster pace over the last year as the number of nodes on the network grew by two thirds in 2021.