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Binance has announced its intention of implementing Lightning Network, a layer 2 Bitcoin scaling protocol, on its platform after experiencing an episode of congestion regarding withdrawals on the Bitcoin network. The exchange had to pause bitcoin withdrawals twice due to a large backlog of operations stuck as a consequence of high transaction fees.
Binance Announces It Is Working on Implementing Lightning Network Withdrawals
Leading cryptocurrency exchange Binance has recently announced it is working to integrate Lightning Network, a bitcoin-based scaling solution, into its platform. The exchange made the announcement after having to pause bitcoin withdrawals twice in a single day due to network congestion.
The congestion issue Binance referred to had to do with the rise of BRC-20 tokens, which are issued on top of the Bitcoin blockchain, and have overwhelmed the BTC mempool, having more than 450,000 transactions pending with fees of $13 dollars at the time of writing, according to blockchain data.
The implementation of Lightning Network withdrawals would allow users to have the option of sidestepping the high fees collected by the BTC network when experiencing this kind of congestion. Binance announced that, besides starting to work on this implementation, it would adjust its withdrawal fees to avoid facing this issue in the future and that it would continue to monitor the situation, adjusting fees accordingly.
Also, Binance stated:
This is a learning opportunity for us and we’ll do our best to prevent this from happening again.
Addressing BTC Outflow Rumors
On May 7, the exchange paused BTC withdrawals for the first time, stating that it was “experiencing a congestion issue,” and that the Binance team was “currently working on a fix until the network is stabilized” vowing to reopen withdrawals as soon as possible.
Shortly after, bitcoin withdrawals were reopened only to be suspended once again due to “the large volume of pending transactions” the exchange had. This situation prompted the diffusion of messages regarding large outflows coming from the directions associated with Binance. Changpeng ‘CZ’ Zhao, CEO of Binance, dismissed these reports as FUD on social media.
Binance clarified that the outflows were “actually movements between Binance hot and cold wallets due to the BTC address adjustments” and that the reports were mistakenly identifying the wallets of the exchange as belonging to others.
What do you think about Binance’s announcement of the implementation of the Lightning Network for withdrawals? Tell us in the comments section below.
Sergio Goschenko
Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price rise happened during December 2017. Having a computer engineering background, living in Venezuela, and being impacted by the cryptocurrency boom at a social level, he offers a different point of view about crypto success and how it helps the unbanked and underserved.
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This article originally appeared on news.bitcoin.com
As the popularity of Bitcoin continues to rise, so do the issues related to the network. One of the main issues in recent times has been the congestion of the Bitcoin network, which has resulted in delayed transactions and increased fees. In response to this issue, Binance has announced the implementation of the Lightning Network withdrawal feature.
The Lightning Network is an off-chain scaling solution that enables faster and cheaper transactions on the Bitcoin network. It allows users to transfer Bitcoin without having to wait for confirmations on the blockchain, which can take anywhere from a few minutes to several hours, depending on the level of congestion.
By using the Lightning Network, Binance users will be able to withdraw Bitcoin quickly and with lower transaction fees than before. The Lightning Network is a crucial technology in the Bitcoin ecosystem, as it helps to solve the congestion issues that have caused frustration for many users.
Binance is one of the largest cryptocurrency exchanges in the world, and the announcement of the Lightning Network withdrawal feature is a significant milestone for the Bitcoin network. Other exchanges are likely to follow suit, as the Lightning Network continues to gain momentum as a solution to Bitcoin’s scalability issues.
The implementation of the Lightning Network withdrawal feature by Binance is a positive step for the Bitcoin network, as it will help to improve the network’s speed and reduce transaction fees. It is a testament to the ongoing efforts to improve the scalability of the network and make Bitcoin more accessible and usable for the average person.
Overall, the implementation of the Lightning Network withdrawal feature by Binance is a positive development for the Bitcoin network. It is a step in the right direction for addressing the congestion issues faced by the network and improving Bitcoin’s overall usability. As more exchanges adopt the Lightning Network, we can expect to see further improvements in the network’s scalability and usability in the years to come.
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