Binance Sets Up Bitcoin Lightning Nodes to Ease Deposits and Withdrawals
A host of crypto exchanges have set up their own Lightning nodes in recent months to offer faster bitcoin transactions to users.
Jun 20, 2023 at 9:37 a.m. UTC
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Crypto exchange Binance today said it had set up Lightning nodes on the Bitcoin network to eventually offer Lightning-based bitcoin deposit and withdrawal services to users, as per a Tuesday tweet.
“Binance is working to integrate the Bitcoin Lightning Network for deposits and withdrawals,” the exchange tweeted. “However, there's still more tech work to be done. We'll update once Lightning is fully integrated.”
The Lightning network is dubbed a “second layer” of the Bitcoin blockchain, which serves to speed up transaction times and decrease network congestion. It achieves this by setting up payment channels that conduct off-chain transactions between users with fees of a few cents.
In May, Binance said it would integrate the Lightning network to ease deposit and withdrawal activity for users. Binance had temporarily paused bitcoin withdrawals citing network congestion at the time – which led to concerns among users around the exchange’s reserve funds.
Exchanges Kraken and Bitfinex already offer Lightning network services to users, and Coinbase CEO Brian Armstrong suggested in an April tweet that the exchange would offer Lightning network to users in the future.
The Lightning network holds just under $145 million worth of bitcoin meant for quick payments as of Tuesday morning, data shows.
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Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.