Bitfinex Integrates Lightning Network For Instant Deposits And Withdrawals

By December 5, 2019 Bitcoin Business
Click here to view original web page at cryptoiq.co

Bitfinex has become the first major cryptocurrency exchange to integrate the Lightning Network, which is a 2nd layer scalability solution for Bitcoin (BTC) which facilitates instant transactions while requiring practically zero fees.

Apparently Bitfinex is running a full Lightning node, and customers are able to open up payment channels with Bitfinex via https://ln.bitfinex.com/, allowing for instant deposits and withdraws. This is because Lightning payment channels bypass the blockchain, and only require a blockchain transaction when opening or closing the channel.

This is far better than the regular situation when depositing Bitcoin (BTC) to a crypto exchange, where customers typically have to wait for anywhere from 1 to 6 confirmations, which is 10-60 minutes on average and can end up being hours or over a day during times of network congestion.

With the Lightning Network deposits will be instantaneous, creating a far more optimal situation for traders who are conducting arbitrage or trying to buy or sell crypto at a certain price. Oftentimes traders miss opportunities due to waiting for Bitcoin (BTC) confirmations.

Also, one of the main caveats of the Lightning Network has been that it has low channel capacity, averaging $200 and sometimes as high as $600. However, Bitfinex’s Lightning channel has an inbound capacity of 3.5 Bitcoins (BTC) and an outbound capacity of 1.5 Bitcoins (BTC) at this time, meaning it can easily facilitate transactions in excess of $10,000.

The Chief Technical Officer (CTO) of Bitfinex, Paolo Ardoino, says “As one of the most advanced cryptocurrency exchanges, we’re committed to growing the Lightning Network on our platform to boost Bitcoin’s competitiveness as a means of payment, bringing Bitcoin ever closer to achieving mass adoption.”

This indicates that Bitfinex is not only adopting the Lightning Network to create a smoother experience for customers, but also to increase the reputation of the Lightning Network to help it spread globally. Indeed, the Lightning Network is highly beneficial for e-commerce and retail Bitcoin (BTC) transactions, since when using the Lightning Network customers and merchants do not have to wait for confirmations, and transaction fees are practically nil. Therefore, the Lightning Network is critical for global Bitcoin (BTC) adoption.

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