- Binance is implementing the Lightning Network for deposits and withdrawals
- The exchange had to halt Bitcoin withdrawals twice during the recent Ordinals spike due to the network being clogged
- Binance is one of few big exchanges that don’t currently support the Lightning Network
Binance is implementing the Lighting Network for bitcoin deposits and withdrawals following the recent issues caused by the popularity of BRC-20 projects. The exchange was forced to halt bitcoin withdrawals in May when the surge in BRC-20 transactions, namely the Ordinals project, led to some 400,000 transactions being stuck in the queue (‘mempool’) and transaction fees being pushed to two-year highs. Binance hinted after the incident that it could follow other exchanges and implement the Lightning Network to ease congestion, which it has confirmed it is now working on, although it hasn’t given a timeline.
Lightning Network Gradually Solving Scaling Issues
Congestion on the Bitcoin network had been a theoretical concern for developers since its very early days and a practical issue since 2016 when Bitcoin blocks first became full. The changes brought about by the likes of SegWit have helped relieve the blockchain to an extent, but not to the point where it can happily cope with its function as a payment network and a digital art network at the same time.
The massive growth of Ordinals since its introduction in March has pushed the blockchain to its limit, something previously unheard of in a bear market, with the mempool becoming clogged with transactions. This flurry of activity led to transaction fees spiking to levels not seen since the April 2021 bull run, and eventually caused Binance to halt withdrawals twice over one weekend in May. When withdrawals resumed (with higher fees), Binance suggested that it was considering following the likes of OKx and Bitpay and integrating the Lightning Network.
No Timeline But Plenty of Happy Customers
A month after the congestion issues peaked, Binance has confirmed that Lightning deposits and withdrawals are imminent:
#Binance is working to integrate the #Bitcoin Lightning Network for deposits and withdrawals.
Some eagle-eyed users spotted our new lightning nodes recently. Yes – that’s us!
However, there’s still more tech work to be done. We’ll update once Lightning is fully integrated. https://t.co/N0oN8561sN
— Binance (@binance) June 20, 2023
Almost all responses to the news were positive, with many welcoming the arrival of lower transaction fees and faster times, although Binance has not given a timeline of when Lightning Network integration will be ready for public use.
