Kraken has lowered Bitcoin Lightning withdrawal fee to ZERO

[hugeblack]

To accelerate financial inclusion, Kraken has lowered the withdrawal fee for #bitcoin over Lightning to zero.

Thank you for your feedback!

Source ---> https://twitter.com/pierre_rochard/status/1519788223718903808

they still have low on-chain withdrawal fees which is about $19.40 or 0.0005 BTC compared to AVERAGE $18.20 or 0.0004691 BTC

What do you think of the impact of this decision on the Lightning Network adoption (if many platforms follow the same approach) and on altcoins that have low withdrawal rates or blockchain with low fees.

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[bitmover]

To accelerate financial inclusion, Kraken has lowered the withdrawal fee for #bitcoin over Lightning to zero.

Thank you for your feedback!

This is amazing.

Usually withdrawal fees are one of the most expensive services of exchanges.  By lowering to zero, they are making a huge incentive for people to create a lightning wallet.

Certainly an excellent alternative for people willing to buy/trade bitcoin.

For those looking for a lightning wallet  , As far as I have researched,  electrum is the best lighting wallet to use.

[stompix]

That on-chain fee was just a way for some exchanges to munch some more $, even a single next block transaction wouldn't have cost that much, but with batching it would have been even lower.  Anyhow, pretty interesting move, can't wait to see a similar move from the two big "spammers", Coinbase and Binance, but in the latter's case I doubt they will do such a thing, they are using the fees as a motivation to have people use their shitty coin.



Segwit is more expensive...lol

Usually withdrawal fees are one of the most expensive services of exchanges.  By lowering to zero, they are making a huge incentive for people to create a lightning wallet.

If all of them would o so it would get rid of a lot of coins that are currently used just because of this fee thing, like Doge and Litecoin.

they still have low on-chain withdrawal fees which is about $19.40 or 0.0005 BTC compared to AVERAGE $18.20 or 0.0004691 BTC

It's 0.0005 BTC minimum, the fee is 0.00001 BTC, quite reasonable. Maybe they have changed is recently?

[noorman0]

-snip-
What do you think of the impact of this decision on the Lightning Network adoption (if many platforms follow the same approach) and on altcoins that have low withdrawal rates or blockchain with low fees.

A great start and good news for retail traders if this feature is adopted across major exchanges, so far people have had no choice but to keep small amounts of bitcoin on a centralized exchange due to their skepticism to withdraw from exchanges due to unreasonable fees.
To be honest I would like to see bitcoins more circulated across more private addresses, not just overfilling the hot wallets of hack-prone exchanges.

[mk4]

What do you think of the impact of this decision on the Lightning Network adoption (if many platforms follow the same approach) and on altcoins that have low withdrawal rates or blockchain with low fees.

Huge props to Kraken for this, but I'm guessing minuscule. We need lightning adoption on exchanges(like Binance) with a lot of retail users that have low net worth. Then newbies will then be incentivized to download a lightning wallet. There's a reason why the BNB chain has so much usage from the newbies despite being such a fundamentally crappy platform compared to it's competitors.

[mindrust]

Awesome news. This will certainly increase bitcoin adoption in the long run. It is a drop in the bucket but a big one. When enough people start using LN, L1 also become usable again for many every day purchases. LN is fine but L1 is still the most important part of the project so we definitely need a usable L1 because otherwise people won't be able open/close LN channels.

[NeuroticFish]

and Binance, but in the latter's case I doubt they will do such a thing, they are using the fees as a motivation to have people use their shitty coin.

In theory you're right. However, if a big enough number of people would keep tagging CZ on Twitter and ask for adding LN to Binance, I expect he will eventually go for it (but I don't know what fee will they set there).

[ABCbits]

Some time ago i complained about it[1], so it's amazing news. I certainly didn't expect they would reduce it to 0, although i wonder how long it'll last.

[1] https://bitcointalk.org/index.php?topic=5392509.msg59716351#msg59716351

[dkbit98]

Some time ago i complained about it[1], so it's amazing news. I certainly didn't expect they would reduce it to 0, although i wonder how long it'll last.

If FTX can keep zero withdrawal fees on main bitcoin network, than I don't see why Kraken can't have zero fees on Lightning Network.
With this move they are trying to spread LN adoption and attract new customers, and I am sure all other centralized exchanges will have to add LN sooner or later.
I honestly don't care what Binance and CZ are going to do, but it would be nice to see Kucoin and FTX adding support.

[o_e_l_e_o]

Anyone with a Kraken account used this yet? What is the maximum limit on withdrawals? Does it process instantly, or is there still a delay? Do Kraken allow Lightning deposits as well?

Given that they will still need to open/close/balance their Lightning channels, they are still incurring on-chain fees. I wonder if they are willing to cover all those themselves from their trading or on-chain withdrawal fees, or if their Lightning fees will go back up in the future.

-snip-

Really makes you wonder why anybody in their right mind continues to use Binance, when they charge 50x the withdrawal fee that Kraken does, and then just pocket 98% of it as pure profiteering.

[Lucius]

Really makes you wonder why anybody in their right mind continues to use Binance, when they charge 50x the withdrawal fee that Kraken does, and then just pocket 98% of it as pure profiteering.

Probably because they managed to get a very large number of users for all the time when they did not have a mandatory KYC, and although some data say that the number of users is declining, habits (good or bad) are difficult to change. In addition, one average user who knows how to send fiat from their bank to crypto exchange and buy a BTC is certainly not familiar with what LN is and how to use it.

For those looking for a lightning wallet  , As far as I have researched,  electrum is the best lighting wallet to use.

Maybe I'm wrong, but I got the impression that the Electrum LN is not very user-friendly, and I remember that the Phoenix wallet is perhaps the best for beginners in this regard.

[sheenshane]

Anyone with a Kraken account used this yet? What is the maximum limit on withdrawals? Does it process instantly, or is there still a delay? Do Kraken allow Lightning deposits as well?

Good questions and I hope there's someone who can give an insight on this and it might be those who have personally used this platform and experienced it.

It's good news for all traders out there, they have now a choice to have a zero fee by using this exchange.  Actually, AFAIK, as I know there are 4 of them as candidates that adopt Lightning Network last year, Coinbase, Binance, Robinhood, and Kraken but now I didn't expect that Kraken take it seriously and now it has a zero fee, it's a great advantage to trader.  We hope some of those popular exchange platforms will follow and do the same on Kraken.  What do you think about Bitfinex that already adopted this LN protocol?  Maybe it will do the same.

[PrimeNumber7]

and Binance, but in the latter's case I doubt they will do such a thing, they are using the fees as a motivation to have people use their shitty coin.

In theory you're right. However, if a big enough number of people would keep tagging CZ on Twitter and ask for adding LN to Binance, I expect he will eventually go for it (but I don't know what fee will they set there).

I don't think repeatedly asking CZ to add LN will get him to add it. I think market forces will be what gets Binance to add LN support. Although as others have mentioned, Binance has incentives to get people to use the binance coin (or whatever it is called) blockchain.

Anyone with a Kraken account used this yet? What is the maximum limit on withdrawals? Does it process instantly, or is there still a delay? Do Kraken allow Lightning deposits as well?

Based on the screenshot in the OP, they also accept LN deposits. If they didn't, they would need to consistently be rebalancing their channels.

I would assume the timing would be similar to any other transaction being approved (needing to go through the various security checks before the transaction is sent out), and likely has limits according to Kraken's current capacity, similar to any exchange likely set limits for on-chain withdrawals.

Given that they will still need to open/close/balance their Lightning channels, they are still incurring on-chain fees. I wonder if they are willing to cover all those themselves from their trading or on-chain withdrawal fees, or if their Lightning fees will go back up in the future.

LN transactions are not free, although the costs associated with them are very small currently. If Kraken can process 1000 withdrawals for every LN channel they need to open, the transaction fee costs associated with those 1000 withdrawals are 0.1% of what they would be if each transaction was processed individually, possible less considering that from time to time coin needs to be sent to/from cold storage.

If Kraken is also accepting LN deposits (as would make sense), in theory, they should not need to frequently rebalance their channels, nor close/reopen channels, provided their current sizes are sufficiently large.