The Lightning Network (LN) made the Bitcoin (BTC) – DeFi combination possible. The LN will face other challenges on Kraken. The exchange plans to integrate it to drastically lower transaction fees and speed up transaction processing.
1 penny fee thanks to the Lightning Network
In a press release dated December 16, 2020, Kraken announced the integration of Lightning Network to its infrastructure in 2021.
The press release indicates that this integration will bring major improvements in terms of processing speed and transaction costs, the LN enabling millions of transactions to be executed per second.
The strategic manager of Kraken, Pierre Rochard, indicated that the LN will initially be available only for withdrawal operations.
Transaction fees will drop from $ 10 to less than a penny, just enough to deter spammy transactions.
According to Rochard, functionality for deposit operations should follow. The integration will allow deposits to be placed immediately, meaning traders won’t have to wait 30 minutes before confirming transactions.
For cryptophiles trading at the speed of light
Rochard indicates that the LN has an advantage for traders who prioritize speed. To facilitate integration, Kraken should recruit a team specifically dedicated to Lightning Network.
The Lightning Network is a protocol built on top of the main network of Bitcoin (BTC). It was deployed on the network after the activation of Segwit in 2017.
Its goal is to reduce the number of transactions stored on the blockchain by creating payment channels based on smart contracts, to facilitate transactions between individual users. The balances will then be transmitted to the main blockchain for settlement.
According to DeFi Pulse, the total value blocked in the network Lightning would currently be $ 21 million.
The Lightning Network goes well beyond the mission initially assigned to it: to make Bitcoin a real currency usable for payments, by making it possible in particular to process micro transactions, all this thanks to a scalable protocol capable of processing faster transactions – with the main layer of the BTC network facing these issues. The overlay of the BTC network solves other problems and allows the creation of new crypto services. Other exchanges could follow Kraken’s path if the experience proves successful. It always takes a dedicated actor to lead the way, others will follow if it leads to success.
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