In a significant development for the Bitcoin Lightning Network, the leading cryptocurrency exchange Coinbase announced a partnership with the Lightning-focused blockchain infrastructure firm, Lightspark.
Lightspark stated that the integration with Coinbase redirected a larger volume of transaction activity away from Bitcoin’s base layer, which had seen a substantial increase in fees over the past 12 months.
In a strategic move that brought the leading crypto exchange closer to offering Bitcoin Lightning integration to its users, Coinbase partnered with Lightspark, an enterprise-focused Bitcoin Lightning solution spearheaded by ex-PayPal president David Marcus.
Brian Armstrong, CEO of Coinbase, took to X on April 4 to announce the fast-approaching arrival of Bitcoin Lightning integration on the platform, a development that could radically transform the user experience for Coinbase’s 108 million-strong user base by opening the door to faster and more affordable Bitcoin transactions via the Bitcoin Lightning Network.
In an April 3 post, Lightspark detailed that “Lighting up all Coinbase touchpoints with Lightning” would redirect additional transaction activity to Bitcoin’s second layer, thereby addressing the recent surge in fees on Bitcoin’s base layer.
Launched in 2022, Lightspark focused its resources on streamlining the process of implementing and maintaining a Lightning node, which is essential for enabling fast and efficient Bitcoin transactions on the Lightning Network.
The firm additionally developed Lightspark Predict, an AI-powered intelligent engine designed to enhance liquidity management and real-time routing, with the goal of maximizing transaction success rates and finality times.
Bitcoin financial services firm River reported that the success rate of Lightning payments was approximately 99.7%, based on an analysis of 308,000 Lightning transactions processed on its platform in October of last year.
Despite the occasional failure of Lightning Network transactions due to insufficient liquidity, River discovered that the average transaction size processed on its platform was a relatively modest 44,700 satoshis, equating to approximately $11.84 at current market rates.
In an effort to gauge the overall adoption and activity on the Bitcoin Lightning Network, River estimated the number of active users to fall somewhere in the range of 279,000 to 1.1 million in September 2022.
Binance, Coinbase’s main rival, incorporated Bitcoin Lightning into its platform in July of last year.
Lightning has also gained traction as a preferred payment method in Lugano, Switzerland, El Zonte in El Salvador (dubbed “Bitcoin Beach”), and Utiva in Costa Rica (referred to as “Bitcoin Jungle”).
While the Lightning Network made impressive strides in expanding the usability and accessibility of Bitcoin, some influential voices in the crypto space, including Bitcoin bull and MicroStrategy CEO Michael Saylor, remained skeptical about its potential as a viable medium of exchange.
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