Two long-established major players in the crypto space, Kraken (exchange) and BitPay (payment processor), just implemented Bitcoin’s favorite side-chain, also known as the Lightning Network. It just so happens that both announcements fell on the same week.
To highlight its significance, this means that all of Kraken’s customers can now benefit from instant withdrawals and deposits… and will pay close to ZERO fees in the process. Kraken is the second major exchange to do this.
For BitPay, on the other hand, it means that their long list of merchants can now receive payments from Lightning-enabled wallets like Cash App and Strike, giving customers a low-cost/quicker alternative when purchasing goods and services with BTC.
If You Don’t Already Know…
Lightning enables cheap and fast BTC transactions by leveraging smart contracts away from the Bitcoin network base layer.
Remember the “I can’t even buy a cup of coffee with it” argument against Bitcoin? Yeah, well so much for that…
Often referred to as “Bitcoin’s Second Layer,” the Lightning Network is a critically important scaling solution for Bitcoin and empowers BTC to be better used for everyday payments or as a medium of exchange. The network can theoretically allow millions of transactions per second as BTC is routed across different channels from sender to recipient.
“Lightning is a lot more efficient than on-chain Bitcoin while also still relying on on-chain Bitcoin’s security, so it really is the best of both worlds”– Pierre Rochard, Bitcoin product manager at Kraken
Both integration milestones were followed by an announcement from Lightning Labs, the startup behind the Lightning Network, that it had completed a $70 million funding round, led by Valor Equity Partners, early backers of Tesla and SpaceX.
The startup says it plans to employ the round’s proceeds to fund its efforts in building Bitcoin and Lightning software, including Taro, a new protocol that leverages Taproot and the Lightning Network to bring even more assets and scalability to Bitcoin. You can read more about Taro and Taproot here.