Coinbase Teams Up with Lightspark to Facilitate Bitcoin Lightning Payments

Coinbase has entered into a partnership with Lightspark, led by former PayPal president David Marcus, to integrate Bitcoin Lightning on its platform, aiming to provide potentially faster and cheaper transactions for its vast user base of 108 million.

Brian Armstrong, Coinbase’s CEO, disclosed that the integration of the Bitcoin layer-2 network is imminent, promising to “light up all Coinbase touchpoints with Lightning” in the near future. This move is expected to alleviate the recent surge in fees on Bitcoin’s base layer by diverting transaction activity to the Lightning Network.

Lightspark, founded in 2022, focuses on simplifying the process of implementing and managing Lightning nodes for reliable transaction sending and receiving. Their efforts also include the development of Lightspark Predict, an AI-powered engine aimed at optimizing liquidity requirements and routing to enhance transaction success rates and finality times.

According to Bitcoin financial services firm River, Lightning payments boast an impressive success rate of around 99.7%, although occasional failures occur when sufficient liquidity is lacking for payment routing. The average Lightning transaction size is approximately 44,700 satoshis or $11.84.

While Lightning has gained traction in various regions like Lugano, Switzerland, El Zonte in El Salvador (dubbed “Bitcoin Beach”), and Utiva in Costa Rica (“Bitcoin Jungle”), opinions regarding Bitcoin’s role as a medium of exchange versus a store of value remain divided. Notably, figures like Michael Saylor advocate for Bitcoin primarily as a store of value technology.

Coinbase’s move to integrate Bitcoin Lightning follows its competitor Binance, which adopted Lightning technology last July.