Binance released an announcement on July 16 claiming that it had incorporated the layer-2 protocol Bitcoin Lightning Network into its platform and that users could use it to make deposits and withdrawals. The announcement was made shortly after Binance had completed the integration of the Bitcoin Lightning Network. This adjustment kicked in as soon as it was made. And now, a little more than one and a half months after this turn of events, the platform has accomplished a significant milestone with the protocol.
The data provided by the analytics tool Amboss indicates that Binance's lightning node has been expanding rapidly. The capacity of the exchange is now rated 14th out of all the deals on the network, boasting 77.7 BTC out of a total of 4,873.39 BTC for the web.
This suggests that the introduction of Binance into the Lightning Network has been well received and that users of Binance are actively employing the Binance lightning node to finish their Bitcoin transactions. Moreover, this implies that the Lightning Network has been well-received overall.
This achievement comes after a report said that Binance's version of the Bitcoin Lightning Network wasn't gaining significant popularity because users needed to build channels on the site where it was being used. According to the report released on August 16, no new tracks were established in the preceding 30 days.
Amboss explained in response that "general users" cannot build direct channels with Binance since the exchange does not advertise the information of its node connections, in contrast to some of its competitors, such as Kraken.
BITCOIN ADOPTION AND THE LIGHTNING NETWORK
Bitcoin was developed with a significant emphasis on decentralization and security, without any considerable attention being paid to its throughput at the time of its creation.
Some people believe that the decentralized nature of Bitcoin and its high level of security make it more valuable than its throughput. However, for Bitcoin to become extensively used for making micropayments and other types of transactions, it will need to have the ability to grow.
As a result, a layer-2 network such as the Lightning Network is essential to supporting Bitcoin in its quest to become accepted as a worldwide payment system. This is because of the fact that Bitcoin is decentralized.
Nodes, which function as tunnels through which transactions initiated by users are processed, are necessary for the operation of the Lightning Network.
Bitcoin can process seven transactions per second (TPS), which helps contextualize this number. This value is pitifully low compared to relatively younger blockchains such as Cosmos, Solana, and Polygon, which each boast a TPS of 10,000, 24,000, and 65,000, respectively.
However, with the assistance of the Lightning Network, Bitcoin can execute transactions at a quicker rate. The layer-2 protocol boasts a TPS of 1 million, which makes this possible.
As a result of the meteoric rise in the number of Bitcoin transactions that took place on its platform, Binance realized it was necessary to implement the protocol on its platform. Because of this, the exchange can execute user transactions in a more timely and cost-efficient manner.
Other exchanges, such as Kraken, Bitfinex, OKX, and BitStamp, have already implemented the Bitcoin Lightning Network to support the increased demand for Bitcoin without encountering network congestion. This was done to accommodate the additional request.
0 Comments