Kraken, the major US-based cryptocurrency exchange, has announced that it will integrate the Bitcoin Lightning Network in 2021.
It has been reported that Kraken emphasized that the integration will drive significant improvements in speed and fees by claiming that Lightning allows Bitcoin (BTC) “to process millions of transactions per second.”
Pierre Rochard, the lead Bitcoin strategist of Kraken, revealed that Lightning will first be integrated for withdrawals during the first half of 2021 by bringing down transfer fees from around $10 per transaction to about one penny, just enough to prevent spam transactions and allowing “instant” withdrawals.
However, Rochard noted that deposit functionality is slated to follow next. While deposits are already free on Kraken, the integration will also allow deposits to clear immediately, meaning that traders will not have to wait the approximately 30 minutes currently required for three confirmations on the Bitcoin blockchain.
He said:
“We really think that this is going to benefit traders who value speed in a lot of the strategies that they employ.”
Likewise, to facilitate the integration, Rochard emphasized that Kraken has committed to hiring a new team focused specifically on the Lightning Network, inviting interested parties to apply for the positions.
Kraken is finally working on integrating the Lightning Network for fast and cheap withdrawals, to be enabled in early 2021. https://t.co/KtZ31tcWYR — Cointelegraph (@Cointelegraph) December 16, 2020
The report said that the protocol seeks to reduce the number of transactions that are stored on the blockchain by using smart contract “payment channels” to facilitate transactions between individual users. The final balances can be broadcast to the Bitcoin blockchain for settlement.
Thus, according to DeFi Pulse, the total value locked in the Lightning Network is currently pushing into new all-time highs of around $21 million.
Source: Cointelegraph