Paxful has joined other pioneering exchanges like Bitfinex and OKCoin to launch Lightning payments Network to boost its service. Yesterday, the company’s CEO announced that it had some discussions concerning the lightning payments, and the company was prices back to make it a reality.
Bitcoin Lightning is a feature that enhances the scalability of the network by ensuring that Bitcoin is processed at a faster and less expensive rate. The main reason for the solution is to lessen the Bitcoin blockchain burdens. More transactions can coincide. Although the answer is still in infancy, some Bitcoin exchanges are already backing it up to promote it.
Lightning Payments Will Accelerate Transactions Among Users
With the lighting payments, users will be able to deposit and withdraw as fast as possible. This will ensure quick completion of transactions because the period of confirmation on the blockchain will be bypassed. One of the Lightning Network promoters is Paxful, a top exchange that is now preparing for the integration.
The firm’s CEO revealed that they would start experimenting with the solution early next month. Then, they will start rolling out gradually to BTC users. Paxful is a peer-to-peer platform through which users exchange Bitcoins. It can be compared to LocalBitcoins that is popular for in-person payments. Various payment methods such as cash and gift cards are enabled on Paxful.
Now, Paxful has adopted Lightning, which Kraken and Bitfinex had earlier endorsed. Bitfinex was the first to endorse the Lightning network, while other exchanges like OKCoin have expressed their interest in integrating the Lightning network into their systems.
As other exchanges enable this network, users will be able to pay and receive funds using BTC in a faster way. Likewise, it will also create more chances for arbitrage to thrive. Hence, the Bitcoin price between exchanges and even premiums will be reduced.
Lightning will Solve the Speed and Cost Problems Associated With Bitcoin
Apart from being slow for transactions, Bitcoin’s cost is too high. This explains the introduction of the Lightning Network. This solution comprises channels that enable people to pay and receive money by bypassing BTC blockchain verification. The popularity of Bitcoin has contributed to its slowdown. This has also made the cost rise. Engineers and researchers have tried several means to solve the problem headlong. This is why they came with the Lightning solution.
In the blockchain, blocks primarily refer to a set of transactions grouped. The design of blockchain enables many transactions to be contained in a block. Suppose you make a transaction, but it could not reach the block instantly. In that case, it automatically joins a queue that can last from minutes to hours and even days, depending on the number of transactions awaiting verification.
The high cost is another major drawback that the Bitcoin network is facing. Proof of work is a consensus protocol on which BTC and other networks are built on. Here, miners try to solve problems to reduce costs. The smaller the number of transactions, the smaller the costs. But as the Bitcoin network is getting bigger, the costs are getting higher.
Paxful has not concluded on the highest deposits, but the CEO was looking at $500 for the beta test. This indicates that Lightning is still in its infancy, and the limit will even be raised when the network reaches its developmental stage.