Coinbase has moved closer to integrating Bitcoin Lightning onto its platform in a recent collaboration with Lightspark, an enterprise-focused Lightning solution led by former PayPal president David Marcus.
In a X post on April 4, Coinbase CEO Brian Armstrong announced that the integration of the Bitcoin layer-2 network is imminent, allowing its 108 million user base to potentially benefit from faster and more cost-effective Bitcoin transactions.
By “lighting up” all Coinbase touchpoints with Lightning, more transaction activity will be shifted to Bitcoin’s 2-layer, addressing the recent surge in fees on Bitcoin’s base layer, as explained in Lightspark’s post on April 3.
Armstrong had previously confirmed Coinbase’s intention to integrate Bitcoin Lightning in September but had not disclosed further specifics regarding the implementation timeline.
Established in 2022, Lightspark has focused on simplifying the complexities associated with setting up and managing a Lightning node for secure transaction sending and receiving.
Additionally, Lightspark developed Lightspark Predict, an AI-powered engine designed to optimise liquidity requirements and routing in real-time, aiming to enhance transaction success rates and finality times.
2/ Bitcoin was the very first asset listed on @Coinbase more than a decade ago. With⚡️Lightning, #Bitcoin transactions will be soon real-time and low-cost, a much-needed upgrade given the recent surge in interest in Bitcoin. Discover more here: https://t.co/znd4TO1m0h
— Christian Catalini (@ccatalini) April 3, 2024
According to Bitcoin financial services firm River, Lightning payments boast a success rate of approximately 99.7%, based on 308,000 Lightning transactions requested on its platform in October.
Failures typically occur when a payment route with adequate liquidity cannot be located. River’s findings revealed that the average Lightning transaction size was approximately 44,700 satoshis or $11.84.
The firm estimated that between 279,000 and 1.1 million Lightning users were active as of September.
Coinbase’s biggest competitor, Binance, integrated Bitcoin Lightning in July last year.
Lightning has gained traction as a payment method in various locations, including Lugano, Switzerland; El Zonte in El Salvador, famously dubbed “Bitcoin Beach”; and Utiva in Costa Rica, known as “Bitcoin Jungle.”
Nevertheless, Bitcoin advocate Michael Saylor and other industry figures argue that Bitcoin is better suited as a technology for storing value rather than serving as a medium of exchange.