- Bitfinex has become the first major cryptocurrency exchange to integrate the Lightning Network, facilitating instant deposits and withdraws
- Capacities are 1.5 BTC for withdrawals and 3.5 BTC for deposits
Bitfinex has announced that they are now running a full Lightning Network node, which allows customers to open up payment channels for instant deposits and withdraws while paying practically zero transaction fees. This makes Bitfinex the first major crypto exchange to integrate the Lightning Network.
The Lightning Network is a second-layer scalability solution for Bitcoin that bypasses the blockchain, which means that no block confirmations are needed. Blockchain transactions are only needed to open and close a Lightning payment channel. This is much more efficient than the regular situation on crypto exchanges where Bitcoin deposits require 1-6 confirmations, which take 10 to 60 minutes on average, but can take hours or over a day during times of network congestion. Also, regular Bitcoin transactions can have significant transaction fees.
Now with Lightning Network customers can instantly deposit or withdraw Bitcoin, creating a much more favorable situation for traders who are trying to conduct arbitrage or buy crypto at a certain price. Oftentimes, market prices fluctuate while a Bitcoin deposit is confirming, which can cause a trader to miss opportunities.
Also, the main caveat of the Lightning Network is that payment channels have low capacity, typically less than USD 600, but Bitfinex has a fairly high capacity of 3.5 Bitcoins for deposits and 1.5 Bitcoins for withdraws.
This is a major step for global Lightning Network adoption, and Bitcoin adoption as well, since the Lightning Network makes it possible to use Bitcoin for instant payments in a retail environment, as opposed to regular Bitcoin payments where confirmations can take too long.
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