• Binance CEO has indicated plans for the exchange to integrate the Lightning Network for saved costs and faster transactions.
  • The feature will be supported for small amounts at first, with various solutions already in the works.
  • CZ also advertised the exchange’s mining pool, saying Binance aims for a model that prioritizes low fees.
  • Binance does not intend to get involved in the hardware of Bitcoin mining.

Binance CEO Changpeng Zhao, alias CZ, has revealed plans for the exchange to integrate the Lightning Network, a Layer-2 (L2) payment protocol layered on top of Bitcoin and other cryptocurrencies and blockchains.

Also Read: Will Binance CEO Changpeng “CZ” Zhao be the next Elon Musk for meme coins?

Binance exchange leverages Dubai’s crypto-friendliness for industry growth

Binance CEO Changpeng Zhao spoke during an AMA (Ask Me Anything) session on Twitter Spaces, answering questions from the audience. Among the key highlights of the one-hour long question and answer engagement was CZ’s daily routine, the exchange’s presence in Dubai, investment advice on social media, mining and the Lightning Network.

CZ, who advised against blindly following investment advice from social media advisers, said that Dubai was already an important crypto innovation hub with multiple industry-related events taking place almost every evening. The Binance executive attributes this to the international presence of the country and its business-friendly practices that has led to a booming local economy. With over 700 employees in Dubai within a span of a little under two years, Binance is growing at a rapid pace.

On the question of mining, CZ articulated that while Binance does not run a mining farm, neither does it plan to, alluding that the company is more focused on software than hardware.  Nevertheless, the exchange runs one of the biggest mining pools with special interest in models that prioritize low fees. Miners use the Binance’s pool, tapping from the exchange’s liquidity to cover their operational costs.

Binance to support Lightning Network

With traders and investors opting for cheaper and faster transactions, the largest exchange by trading volume is looking to integrate the Lightning Network for its Binance Pay and related wallet services. According to CZ, every exchange should adopt the L2 payment protocol as a helpful innovation for the future.

According to Changpeng Zhao, the principle limitation of the lightning network is the inability to pre-generate addresses, which is why the Binance team is working on a way around this challenge. The protocol will however be enabled for small transactions at first and while CZ did not provide a specific date for the roll out, he said efforts were already underway as part of the platform’s commitment deliver benefits like saved costs with faster transactions to users. 

In the meantime, Binance “uses a secure wallet infrastructure where addresses are pre-generated in a separate protected environment, and public keys are then exported to the production environment, which is different from the wallet environment.”

Notably, the Lightning Network theme took center stage around May 7 when Binance exchange temporarily closed Bitcoin withdrawals, citing Bitcoin (BTC) network congestion.

The exchange had suffered a similar issue in June 2022 when stuck transactions caused backlogs. As reported, the downtime played to OKX exchange’s favor, calling users’ attention to the Lightning Network for more affordable rates. The likes of Alex Thorne, the head of Firmwide Research at Galaxy Digital New York advocated for more engineering to bypass expensive blockspace amid a high-fee environment, hence the Lightning Network.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Ripple extends gains by 5% on Friday as CEO hints at institutional crypto products with CME XRP-Dollar index

Ripple extends gains by 5% on Friday as CEO hints at institutional crypto products with CME XRP-Dollar index

Ripple (XRP) traders’ sentiment turned positive on Friday, as CEO Brad Garlinghouse highlighted the addition of XRP-Dollar reference rate and indices to the CME Group and CF Benchmarks. 

More Ripple News

Worldcoin crumbles under selling pressure even as OpenAI eyes human-level problem-solving

Worldcoin crumbles under selling pressure even as OpenAI eyes human-level problem-solving

OpenAI, the American tech firm behind the Large Language Model ChatGPT, announced five levels towards building an Artificial General Intelligence (AGI). Employees at the firm told Bloomberg that with ChatGPT, Open AI is currently at level one. 

More Worldcoin News

VeChain break above descending trendline sparks rally speculation

VeChain break above descending trendline sparks rally speculation

VeChain price breaks above the descending trendline, suggesting a bullish move. Sideline buyers can accumulate VET between $0.0247 and $0.0239. A daily candlestick close below $0.0204 would invalidate the bullish thesis.

More VeChain News

Bitcoin Weekly Forecast: Investors wonder if BTC troubles are behind

Bitcoin Weekly Forecast: Investors wonder if BTC troubles are behind

Bitcoin (BTC) stabilized around the $57,000 mark this week, while the German Government persists in transferring Bitcoin to exchanges. Concurrently, US spot Bitcoin ETFs have recorded inflows. 

More Bitcoin News

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin (BTC) stabilized around the $57,000 mark this week, while the German Government persists in transferring Bitcoin to exchanges. Concurrently, US spot Bitcoin ETFs have recorded inflows. On-chain analytics indicate that whales are accumulating BTC during dips, potentially foreshadowing an imminent rally in the days ahead.

 

Read full analysis

BTC

ETH

XRP