OKCoin announced the integration of Lightning Network.
Users will benefit from lower fees and shorter confirmation times.
Rising transaction fees are driving more businesses to adopt the Lightning Network.
OKCoin Exchange plans to integrate Lightning Network Payments (Instant Payments) later this quarter. Those who use the implemented solution to deposit their assets with the cryptocurrency exchange platform will benefit from faster turnaround times and lower transaction fees.
OKCoin Exchange joins a handful of other exchanges that offer Lightning Network payments. A recent rise in Bitcoin’s transaction costs could continue to accelerate adoption.
OKCoin Exhange adopts “Layer-2” solutions
OKCoin Exchange will become one of the first US-based exchanges to integrate “ Layer-2 ” solutions. He revealed his intention to launch Lightning payments in the coming weeks via a blog post on Friday.
The Lightning Network is a solution to evolve the Bitcoin network by reducing the demand for space on the blockchain. Payments therefore occur on a layer above the Bitcoin blockchain, and then settle on the main blockchain.
Lightning transactions do not require confirmation by Bitcoin miners. Therefore, transactions do not consume additional costs, which allows micro-payments.
OKCoin Exchange charges a Lightning transaction fee of around just $ 0.01. At the time of writing, the average Bitcoin base chain transaction fees are over $ 13. Likewise, the exchange says that deposits and withdrawals will only take seconds compared to previous confirmations, sometimes taking hours.
When demand for space on the blockchain is low, basic transactions typically take between ten minutes and an hour, depending on the number of confirmations required. This can dramatically increase when the network is busy.
The Lightning integration will also allow OKCoin exchange to lower its minimum deposit and withdrawal limits. Previously, the minimum accepted payment was 0.001 BTC (~ $ 35).
The exchange will drop this down to just 100 satoshis (0.000001 BTC). At the current price of bitcoin , the minimum deposit / withdrawal will be around $ 0.04. OKCoin CEO Hong Fang described his reasoning behind the integration:
“As part of our technology analysis, we assessed the strength and quality of node blockchains, and now believe that the network is strong enough to participate as an exchange platform with a higher volume of withdrawals and deposits. “
He added that he hopes other companies will embrace the Lightning Network. If they were widely used by customers on many exchanges, the blockchain transaction fees would also decrease, increasing the utility of the Bitcoin blockchain.
OkCoin Exchange: Fee Rise Encourages Lightning Adoption
A general upward trend in the price of bitcoin that started last March is the increasing demand for space on the blockchain. Data from BitInfoCharts shows that average transaction fees have increased.
The average fee for a mainchain transaction peaked at around $ 17 on January 12. They’ve since fallen to just over $ 13, still much more than the average $ 0.05 to $ 1 fee reported in early 2020.
OKCoin is the latest in a growing list of exchanges to enter the Lightning Network. Along with other lesser-known trading sites , Bitfinex, Kraken, and CoinCorner have all added or announced support plans.
While Lightning integration has obvious advantages, exchanges have always been slow to embrace Bitcoin upgrades. Binance, for example, didn’t integrate deposits with SegWit addresses until late 2020, and data from on-chain analyst Willy Woo shows that less than half of transactions use this economical format.
Still, Lightning Network is growing. BitcoinVisuals shows that there are now close to 8 500 nodes connected with the Lightning payment channels, against less than 5,000 this time last year.