In an exchange of tweets between Brian Armstrong, the CEO of Coinbase, and Jack Dorsey, the chief of Block, the former expressed his interest in integrating the Lightning Network onto their platform. Armstrong was responding to a query by Dorsey that accused Coinbase of ignoring Bitcoin and the Lightning Network.
Armstrong stated, “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.”
Bitcoin Lightning Network on Coinbase
In the Twitter exchange between the two industry leaders, Armstrong clarified that he is not ignoring the Bitcoin Lightning Network. He noted, “We’ve onboarded more people to Bitcoin than probably any company in the world.”
In April this year, BeInCrypto reported that Armstrong was keen to integrate the layer 2 scaling solution. Armstrong’s statement came at a time when the network adoption has grown on the back of payment processors and wallets.
The layer-2 network reached an all-time high in open channels in February 2022 at just under 83,000. This figure has declined slightly since then but is still around 70,400 unique open channels, according to Bitcoin Visuals data.
Dorsey replied to Armstrong, acknowledging that Coinbase has introduced more people to Bitcoin than any other company. He also suggested that Coinbase should focus more on Bitcoin and layer 2 technologies, hinting at the possibility of a partnership.
Dorsey emphasized,
“We want an open protocol for money transmission for the internet that’s not controlled by a single individual, company, or government.”
This discussion comes in the wake of Binance’s recent integration of the Lightning Network onto its exchange. On July 17, Binance announced that its users can now deposit and withdraw Bitcoin using the Lightning Network.
Especially when the Lightning Network, as a layer 2 scaling solution for Bitcoin, aims to enable faster and cheaper transactions. It operates by creating off-chain transaction channels that are later settled on the main chain.
As of June 18, 2023, the Lightning Network has over 18,000 nodes. The network capacity, representing the cumulative Bitcoin capacity across all channels, is 5,465.3 BTC, approximately $145 billion.
If you’re confused about how to accept crypto payments, we got you covered: How To Accept Crypto Payments: A Brief Guide
Challenges of the Network
Building on the Lightning Network comes with its own set of challenges. David Marcus, CEO of Lightspark, recently outlined the difficulties they faced. Marcus revealed that building on Lightning and Bitcoin is at least five times harder than other protocols.
He noted,
“We have one of the strongest engineering teams in the industry, and the more we learn about what it’s going to take to make Lightning do what it needs to do to become the standard universal protocol for payments on the Internet, the more we realize how hard it will be.”
Despite these hurdles, Marcus expressed their commitment to building on the Lightning Network due to its unique qualities and the importance of decentralization.
That said, there is a growing interest in the Lightning Network due to its potential to revolutionize how the Bitcoin blockchain settles transactions.
A Valkyrie Investment report in February 2023 highlighted that between January 2018 and January 2023, the Lightning Network monthly capacity increased to over 5,000 BTC.
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