Binance To Enable Lightning Network Withdrawals For Bitcoin• May 8, 2023 11:49 am • Comments
Binance just made a new announcement where they revealed that they will now allow customers to withdraw Bitcoin using the Lightning network.
This announcement came just after an incident where the exchange had suspended withdrawals for the past 12 hours.
The reason that Binance gave for the pause of withdrawals was due to a high volume of pending transactions, but withdrawals had resumed after around 3 hours.
Now that the Lightning Network is in place for Bitcoin withdrawals, users can hopefully expect to see faster withdrawals.
With that being said, the pause of withdrawals had sparked some panic where some started to question the exchange’s financial stability.
#Bitcoin Lightning Network withdrawals. Coming soon to Binance.
One month ago Coinbase said they are working on integration as well. pic.twitter.com/teSnseNcGB
— DivXMaN (@crypto_div) May 8, 2023
Following the suspension of Bitcoin withdrawals by Binance, there was a wave of FUD with some people questioning the exchange’s financial stability.
Nonetheless, Binance has reassured its users that all funds are ‘SAFU’ and even outlined the measures being taken to avoid such incidents in the future.
One of these measures includes adjusting the fees charged by the exchange. In addition, Binance is working towards enabling withdrawals via the BTC Lightning Network, which is expected to be useful in similar scenarios.
Throughout the last couple of hours, Binance’s outflows have been making headlines.
According to recent data, the exchange saw its largest-ever withdrawal in history, with more than 162,000 BTC leaving the platform.
Binance is not the only crypto exchange that has done this or has explored this in the past as exchanges such as Coinbase have also mentioned this in the past.
Eventually, this may become a standard for all crypto exchanges as ensuring customers have the quick ability to withdraw their assets is essential for maintaining confidence.
It may also be necessary as rules and regulations for crypto exchanges become more strict in some environments such as the US.
At the same time, the data is showing that BTC network fees have been surging as there are many unconfirmed transactions that have happened recently.
This indicates tremendous demand for the Bitcoin network and will be an example of how digital assets will fare when they have achieved more mass adoption.
6/ The Lightning Network is one of Bitcoin’s most recognized Layer-2s.
The #Lightningnetwork focuses on increasing throughput and reducing transaction fees on the Bitcoin network.
Recently, the number of nodes and channels on the Lightning Network have reached new highs. pic.twitter.com/enVirKMsMq
— Binance Research (@BinanceResearch) May 8, 2023
Meanwhile, this is not the first time Binance has paused BTC withdrawals. The exchange had earlier paused withdrawals on May 7 for about one hour.
At the time, it cited network congestion issues.
Bitcoin transaction fees have risen significantly in the last few months and are currently around $10 after rising to as high as $26 a few hours ago.
There are also over 424,000 unconfirmed transactions on the network as of press time.
While $10 might seem low, it is relatively high, given that Bitcoin transaction fees were around $1 about six months ago. Binance CEO Changpeng Zhao said the rise in transaction fees is a sign of a bull market.
Blockchain analytical firm Glassnode reported that the network was “experiencing extremely high demand for blockspace driven by BRC-20 tokens, utilizing text-based inscriptions, and ordinals.”
— Crypto Express News (@Cryptoobulletin) May 8, 2023
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