Lightning transfers are described as “instant,” while Bitcoin network transfers can take between 10 minutes to 2 hours due to limited transaction processing capacity. However, Coinbase cautioned that sending via Lightning to certain self-custody wallets might take multiple hours or fail due to varying implementations or fee structures.
Coinbase will charge a processing fee of 0.1% of the transfer amount for senders.
Lightning payments solution provider Lightspark, led by former PayPal president David Marcus, was chosen to be partnered in this integration.
According to Lightspark’s website, Coinbase is employing a remote-key signing implementation, where Lightning signing keys are held entirely by Coinbase while Lightspark hosts their Lightning node.
The next step for crypto is to make payments instant and free globally.
This will take lots of work from all of us, Coinbase included, getting layer 2’s integrated, better on-ramps, simpler UX/onboarding, etc.
A magic threshold would be getting the average payment under 1 cent… https://t.co/IDWTHsZNUq
— Brian Armstrong (@brian_armstrong) July 26, 2023
Coinbase protocol specialist Viktor Bunin mentioned that they began considering Lightning in August and had been evaluating it for years, highlighting growth and adoption of Lightning, technological maturity, and the goal of reducing onchain payments to 1 second and costing 1 cent as key factors in their decision.
This move by Coinbase, one of the world’s largest BTC exchanges, marks a significant milestone for the ecosystem, with many of its competitors, such as Binance, Kraken, and Bitfinex, having already integrated Lightning into their services in previous years.
coinculture.com
