Global cryptocurrency exchange OKEx is switching to cheaper and faster Bitcoin (BTC) transactions with the upcoming Lightning Network integration.
According to an announcement on February 2nd, OKEx will integrate the Bitcoin Lightning Network “in the coming quarter”, making OKEx a participant node in the Lightning Network.
The integration allows OKEx users to choose the Lightning Network option when depositing and withdrawing BTC to reduce transaction fees and times.
The Lightning Network is a second tier scaling solution and payment protocol based on the Bitcoin blockchain. The protocol was proposed by Joseph Poon and Thaddeus Dryja in 2015 to solve Bitcoin’s scalability problem. According to data from Crypto Analytics website BitInfoCharts, the average Bitcoin transaction fee was more than $ 15 on February 1.
Since the Lightning network itself is not a blockchain, but a secondary layer, the solution was originally mainly used for small or even microtransactions of Bitcoin transactions. To solve this problem, Lightning Labs introduced so-called “wumbo” channels in August 2020 to allow nodes to service larger transactions while lowering fees in the chain. The word wumbo, which apparently means “big,” refers to an episode of SpongeBob SquarePants. These channels are so named because they are larger than the 0.1677 BTC (USD 5,800) limit.
OKEx isn’t the only crypto exchange experimenting with the Bitcoin Lightning network. In July 2019, the European crypto exchange Bitstamp set up its own Lightning network node to improve network capabilities. Another global exchange, Bitfinex, was reportedly the first crypto exchange to enable Lightning payments in December 2019. In September 2020, Bitfinex announced the support of Lightning Network’s Wumbo channels to allow their customers to deposit and withdraw large amounts of Bitcoin.
Amid the Lightning Labs expanding the capabilities of the Lightning Network, more crypto exchanges have incorporated the protocol in recent months. In December 2020, the major US crypto exchange Kraken announced that it would also integrate the Bitcoin Lightning Network in 2021. OKCoin recently announced its plans to integrate the network in the first quarter of 2021.