On July 16, Binance announced that it had integrated the layer-2 protocol Bitcoin Lightning Network into its platform, and users could use it to make deposits and withdrawals. And now, less than two months after this development, the platform has recorded a significant milestone with the protocol.
Binance Node Growing Rapidly
According to data from the analytics platform Amboss, Binance’s lightning node has been growing rapidly. The exchange is currently ranked 14th based on capacity, boasting 77.7 BTC out of the network’s total of 4,873.39 BTC.
This means that Binance’s integration of the Lightning Network has been well-received, and Binance users are actively using the Binance lightning node to process their Bitcoin transactions.
This milestone comes after a report alleged that Binance’s implementation of the Bitcoin Lightning Network wasn’t seeing impressive traction as users weren’t creating channels on the platform. According to the report, published on August 16, no new channel had been created in the last 30 days.
In response, Amboss clarified that Binance, unlike some of its competitors like Kraken, doesn’t broadcast node connection details, so “general users” cannot open direct channels with Binance.
BTC price sitting at $26,042 | Source: BTCUSD on Tradingview.com
Lightning Network Integral To Bitcoin Adoption
Bitcoin was created with a major focus on decentralization and security without any considerable attention to its throughput.
Some argue that Bitcoin’s decentralization and security are more important than its throughput. However, there is a need for Bitcoin to scale if it is to be widely adopted to make micropayments and other transactions.
That is why a layer-2 network like the Lightning Network is integral to helping Bitcoin scale in its quest to be adopted as a global payment system.
The Lightning Network operates with the help of nodes, which act as tunnels by which users’ transactions are processed.
For context, Bitcoin processes 7 transactions per second (TPS). This figure is very low compared to relatably newer blockchains like Cosmos, Solana, and Polygon, which boast a TPS of 10,000, 24,000, and 65,000, respectively.
However, Bitcoin can process transactions faster with the help of the Lightning Network as the layer-2 protocol boasts a TPS of 1 million.
Binance saw the need to integrate the protocol on its platform due to the massive surge in Bitcoin transactions on its platform. By doing so, the exchange can process user transactions faster and cost-effectively.
Other exchanges like Kraken, Bitfinex, OKX, and BitStamp have already integrated the Bitcoin Lightning Network to handle the growing demand for Bitcoin without experiencing network congestion.
Featured image from Triple-A, chart from Tradingview.com
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Author: Scott Matherson