Bitfury’s Lightning Peach team has just announced the implementation of Lightning Network payments on cryptocurrency exchange BTCBIT. This is the result of an ongoing collaboration between the two companies.
Fast (And Cheap) As Lightning
Lightning Network is a second-layer protocol, utilizing a large network of open two-party channels, to enable multiple payments, without the need to record each one individually to the underlying Bitcoin blockchain. This circumvents Bitcoin’s transaction rate limit, allowing faster transactions and greater throughput at lower fees.
Fully regulated Poland-based exchange, BTCBIT, deals in bitcoin and most other major cryptocurrencies. The ability to now use Lightning Network payments brings the benefit of quicker and cheaper payments to its users.
Not Quite As Advertised
Bitfury’s blog post goes into detail on the method for selling your bitcoin and withdrawing funds using LN. Whilst the process is fairly straightforward, there would seem to be a slight anomaly in the thinking behind it.
The problem arises in the transfer of fiat funds from BTCBIT to the customer’s bank account. This can happen through either the SEPA or SWIFT systems.
The SEPA system is only for transactions between European Union countries, made in Euros. These transactions are generally free of charge but usually, take from 1 to 3 working days. So the benefit of a near-instant transaction becomes somewhat less useful.
The SWIFT system is even slower, with most transactions taking 3 to 5 working days. What’s more, transactions through the SWIFT system can cost between $30 and $50, minimizing the benefit of lower payments through LN.
Of course, one would have to use one of these methods of transfer, even without LN. So if you’re already paying and waiting, why accept unnecessary additional cost and delay?
The Right Direction
Despite the friction of fiat on and off-ramps, the wider enabling of LN payments is a sign of further progress for the (still-experimental) enhancement. So any implementation on this scale should be applauded.
This year has already seen Lightning Network implementation such as the promising ‘Sphinx’ upgrade, allowing instant sending of funds without creating an invoice to reduce friction for novice users.
Also increasing LN’s user-friendliness this year was the launch of a ‘granny-friendly’ LN wallet in Australia as well as iOS and Android versions of the user-friendly Bluewallet.
Continued development of the LN platform and ever-increasing use-cases should spur renewed interest in Bitcoin as peer-to-peer digital cash.
Will more exchanges adopt Lightning Network for faster and cheaper transactions? Share your thoughts below!
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