Coinbase has announced the introduction of support for the Lightning Network. This will allow users to send, receive, or pay with Bitcoin from their account much faster and cheaper than before.
Previously, all Bitcoin transfers on Coinbase were processed on the main blockchain, which could take anywhere from 10 minutes to 2 hours and often incurred high fees during times of network congestion.
The Lightning Network, launched in 2017, is a second layer protocol built on top of the Bitcoin blockchain to address scalability issues.
It utilizes bi-directional payment channels to enable nearly-instant, low-fee transactions off-chain without immediate settlement on the main blockchain.
Ethereum’s Layer 2 transactions have recently seen a rise in fees, making the launch of Lightning Network on Coinbase even more significant.
Fees on the Lightning Network are made up of a flat base fee of just one satoshi (the smallest unit of Bitcoin) and a liquidity provider fee, which is a percentage charged on the value of the transaction.
