Since its inception, Bitcoin has been trying to make global payments not only faster but affordable as well. This bit of technology was crucial following the long overdue and exorbitant fees linked to traditional financial transactions. A good example is how US consumers forked over $75 billion (£58 billion) in credit card transaction fees in 2022 alone. In many ways, this shows a financial system that is ripe for revolution.
In a bid to solve this menace, the collaboration between Coinbase and Lightspark aims to introduce Bitcoin’s Lightning Network to Coinbase’s platform, promising better global payment processes.
Today, Blockchain technology has received accolades for its potential to enable faster, more secure and cost-effective payments. Among many initiatives is the integration of the Lightning Network on Coinbase to continue fulfilling this promise on a larger scale. This integration is supposed to greatly reduce the cost of sending BTC globally. It boasts a rate 20 times less than the average 2% charged on credit card transactions and significantly lower than the outrageous figures typically charged for wire transfers.
Several factors fuel the drive towards adopting Cryptocurrency for payments. It represents a broader vision for a financial system that is inclusive, efficient and accessible on a global scale. Through this partnership, Coinbase is reducing transaction times and fees. Also, it is a bold step in support of Bitcoin and the broader Cryptocurrency ecosystem.
In the past, Coinbase handled Bitcoin transfers using a blockchain. In as much as this was safe, it was expensive and time-consuming. It could take 10 minutes to two hours for a single transaction to clear. This will no longer be the case with the Lightning Network, a layer atop Bitcoin that allows instantaneous off-chain Bitcoin transfers at a fraction of the on-chain cost.
Basically, the growing desire by customers for more effective payment methods has led to an increase in demand for the Lightning Network. Coinbase’s integration with the Lightning Network now allows users to send, receive and make payments using Bitcoin straight from their Coinbase account.
Since time immemorial, Coinbase and Bitcoin have been tied by the hip. Coinbase’s venture into innovations like the Lightning Network integration is indicative of a larger trend toward democratising financial services. The company’s efforts speak to a future where faster and cheaper access to money can significantly impact communities. This is especially true with underbanked and unbanked areas. By eliminating exorbitant fees and reducing settlement delays, both consumers and businesses can leverage their resources more effectively.
However, it is worth noting that not all regions have access to Coinbase’s Lightning Network integration. Furthermore, not all transfer scenarios may benefit equally from the cost savings when comparing the Lightning Network to traditional Bitcoin network fees. Even so, the main idea is still very much the same: Cryptocurrency is the future for payments.
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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used for legal, tax, investment, financial or other advice.
