Coinbase Bows to Bitcoin Community Pressure: Lightning Network Integration in Progress

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• The announcement comes after months of pressure from the Bitcoin community, especially Jack Dorsey, who questioned Coinbase’s lack of support for Bitcoin and its layer-2 solutions..
• Coinbase, with over 100 million users, will become one of the largest platforms to support the Lightning Network, potentially boosting its adoption and usability.

Coinbase Embraces The Lightning Network After Facing Criticism

Coinbase, one of the leading crypto exchanges in the world, has finally decided to integrate the Bitcoin Lightning Network, a layer-2 solution that allows for off-chain transactions that settle on Bitcoin’s mainnet. The integration will enable Coinbase’s users to enjoy faster and cheaper BTC transactions, which have been plagued by high fees and congestion in recent times.

The decision was announced by Coinbase CEO Brian Armstrong in a tweet today, where he praised the team for their research and expressed his excitement for supporting Bitcoin, the most important asset in crypto. He also asked for patience from the community, as the integration will take some time to complete.

Coinbase Faces The Wrath Of Jack Dorsey And The Bitcoin Community

The announcement by Armstrong came in response to a tweet by Viktor Bunin, a protocol specialist at Coinbase Cloud, who is leading the effort to integrate the Lightning Network into Coinbase’s platform. Bunin tweeted yesterday that he was happy to lead this effort and invited feedback from the community on various aspects of the integration, such as user experience, open-source tooling, service providers, and edge cases.

Bunin’s tweet indicates that Coinbase is taking a comprehensive and careful approach to the integration, focusing on various details and challenges that might arise. In a brief exchange on Twitter, a user asked Bunin to support unified QR codes to simplify user experience. Bunin responded positively, saying that it seemed to be the best option from a cursory look. He also revealed that they were just starting on the hard bit now – doing the actual integration.

Coinbase’s decision to integrate the Lightning Network comes after months of criticism from the Bitcoin community, especially Jack Dorsey, co-founder and former CEO of Twitter and CEO of Block Inc. Dorsey has been a vocal advocate of Bitcoin and its layer-2 solutions, such as the Lightning Network and Square’s TBD project. In early August, Dorsey tweeted at Armstrong, asking him why he continued to ignore Bitcoin and Lightning and what crypto was a better money transmission protocol and why.

Dorsey’s tweet sparked a heated debate among crypto enthusiasts, with some defending Coinbase’s right to choose its own priorities and others accusing it of neglecting Bitcoin and its innovations. Coinbase has faced similar backlash in the past for its perceived lack of support for Bitcoin and its layer-2 solutions. For instance, in April this year, Coinbase mulled over an integration of the Lightning network for the first time. However, there was no follow-up on this until Bunin’s tweet yesterday.

What This Means For Bitcoin And The Lightning Network

Coinbase’s integration of the Lightning Network is a significant milestone for both Coinbase and the Bitcoin ecosystem. With over 100 million users, Coinbase will become one of the largest platforms to support this layer-2 solution, potentially paving the way for increased adoption and usability of the Lightning Network. The Lightning Network was first proposed in 2016 as a way to scale Bitcoin’s transaction capacity without compromising its security or decentralization.

It allows users to open payment channels with each other and transact off-chain, only settling on Bitcoin’s mainnet when they close their channels. This reduces transaction costs and times significantly, making Bitcoin more suitable for everyday use cases.

Coinbase joins other top-tier exchanges like Binance, Kraken, and Bitfinex in supporting this layer-2 solution. However, Coinbase’s integration might have a bigger impact on the market due to its large user base and influence. It might also encourage other platforms and services to follow suit and adopt the Lightning Network as well.

At press time, BTC traded at $25,959.