A spark (English: Spark). Image by Alex Sukontsev via flickr.com. License: Creative Commons

The large, regulated US exchange Coinbase has long announced that it wants to introduce Bitcoin transactions via Lightning. Now it’s finally becoming concrete: She chooses Lightspark as a technology provider, which is a breakthrough for the startup – and who knows: maybe also for Lightning as a whole.

Lightspark writes in a press release that they are excited to announce that Coinbase has selected Lightspark, and they are already working with the Coinbase team on the technical integration of Lightning.

The Lightning Network scales Bitcoin offchain, but has not yet been able to achieve the desired market penetration and is increasingly being criticized by its own supporters. The integration by what is probably the most important Bitcoin and crypto exchange in the USA could be a breakthrough – especially if the technical implementation allows Lightning to be introduced reliably in a regulatory-compliant, scalable and, above all, low-maintenance manner.

And that’s exactly why Lightspark was founded almost two years ago. The founders, David Marcus and Nicolas Cabrera, bring a wealth of experience from leadership positions at PayPal, eBay, Facebook and Bakkt; if anyone knows how to bring a technology to market and to the masses, it’s her.

Developed after two years, the product “removes most of the complexity that typically comes with implementing and managing a Lightning node and reliably sending and receiving transactions.” Lightspark offers an SDK and APIs as well as other developer tools that allow you to gain access to the Lightning Network in a simple and straightforward way. With “Lightspark Predict,” the startup also offers an AI-supported engine that optimizes liquidity management and routing.

Coinbase uses, the press release explains, an implementation of Lightspark that allows the keys used to sign transactions to be held exclusively by Coinbase, while the Lightning node itself is hosted and managed by Lightspark. Coinbase benefits from Lightspark’s strong infrastructure and enjoys full functionality through a “simple and intuitive interface”. Meanwhile, the exchange’s developers can focus on “the best end-to-end user experience for their customers” without having to worry about the complexities that come with a scaled-up Lightning implementation.

In a way, this news makes it clear where Lightning currently stands, what the disadvantages are, but also what the opportunities are: The complexity of receiving and sending Bitcoins with Lightning seems to grow to the point of monstrosity once it reaches a certain level of scaling Once Coinbase – after all, one of the leading crypto platforms in the USA – wants to take it on itself, but would rather outsource it.

All of this is as far away from a grassroots movement and the emancipation of individual users and retailers as it can be. Lightning once again shows itself to be the antithesis of Bitcoin. However, that doesn’t mean that sending Bitcoins from exchange to exchange via the Lightning Network can’t be a useful application. If speed and fees are important factors, Lightning transactions should become the new standard if there is sufficient penetration. Waiting for confirmations or paying fees would be a thing of the past.

And who knows – perhaps the spread and liquidity that arises when exchanges integrate Lightning reliably and scalably using technologies like Lightspark could actually upgrade the entire network to the point that it is better for normal users – more reliable even with higher amounts – functions.

Source: https://bitcoinblog.de/2024/04/05/coinbase-integriert-lightning-transaktionen/

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