Binance, a cryptocurrency exchange platform, has successfully integrated Lightning Network with Bitcoin transactions in the exchange. This integration means that users can now deposit and withdraw Bitcoin (BTC) directly through the Lightning Network on Binance.
This integration provides several advantages. First, it allows for near-instantaneous deposits and withdrawals, as transactions conducted through the Lightning Network are typically much faster compared to traditional on-chain transactions. Second, the Lightning Network enables lower transaction fees, making it more cost-effective for users to transact with Bitcoin (BTC) on Binance.
The Lightning Network is a second-layer payment protocol built on top of the Bitcoin blockchain. It is designed to address the scalability limitations of the Bitcoin network and enable faster and cheaper transactions.
The Lightning Network operates by creating a network of off-chain payment channels between users. These payment channels allow participants to conduct multiple transactions without directly recording each one on the Bitcoin blockchain.
Instead, only the opening and closing transactions of the payment channel are recorded on the blockchain, while the intermediate transactions occur off-chain.
In the third week of last month, the crypto exchange made the first announcement on a possible integration with Lightning Network. It is also worth recalling that on May 8, Binance experienced a congestion challenge that led to the temporal halting of Bitcoin (BTC) withdrawals due to a significant backlog of pending transactions.
The exchange reported a massive volume of outstanding withdrawals and stated that its team is working on a fix to reopen BTC withdrawals as soon as possible. According to the details of the report, approximately 400,000 Bitcoin transactions were awaiting confirmation, surpassing previous records. Despite the high volume, transaction fees on the Bitcoin network have increased by over 300% in the past year.
Additionally, the introduction of BRC-20 tokens on Bitcoin, which has brought NFTs on the network, was a major factor contributing to the congestion on the network.
