The Layer 2 scaling solution should reduce the fees and times associated with transactions on the exchange
Cryptocurrency spot and derivatives exchange OKEx announced yesterday it would be integrating the Bitcoin Lightning Network in the second quarter of this year. The Layer 2 scaling solution should improve the experience for OKEx users by greatly reducing the fees and times associated with transactions on the exchange.
The length of time and cost of Bitcoin transactions have started to rise as it becomes more mainstream and more people interact with the blockchain. Many are currently put off from using the Bitcoin network as transactions can take up to half an hour to complete with an average on-chain fee of more than $10.
This is why the Lightning Network is needed. It is a second layer scalability solution first proposed in 2015 by Joseph Poon and Thaddeus Dryja. By using smart contracts on the Bitcoin blockchain to enable instant payments, the Lightning Network can resolve congestion on the Bitcoin network, thereby decreasing transaction costs and times.
OKEx CEO Jay Hao commented, “OKEx is extremely proud to be one of the first major exchanges to integrate the Lightning Network. We are always looking for new ways of decreasing user transaction fees and times. By integrating Layer 2 payment protocols like the Lightning Network, we can offer more competitive products to our users and, at the same time, openly demonstrate our support for the Bitcoin network by increasing the number of participant nodes in the Lightning Network.”
By becoming a participant node in the Lightning Network, OKEx will enable users to send and receive Bitcoin almost instantly at practically no cost. All they have to do is select the Lightning Network option when depositing or withdrawing their Bitcoin.
OKEx isn’t the first exchange to make such an announcement. Kraken posted job listings back in December looking for engineers to build user interfaces that would enable their clients to access the Lightning Network. They likewise anticipate completion of integration in the first half of 2021. Bitfinex and River Financial also currently have live support for the Lightning Network.
CEO and Co-founder of Lightning Labs, Elizabeth Stark, added, “OKEx’s Lightning integration marks a big step for its users and the bitcoin community as a whole, enabling instant, global, low fee transactions. OKEx’s leadership in adopting Lightning will help bring bitcoin to the next billion people around the world.”