Deposit and withdrawal now possible via lightning network on Binance exchange

[sokani]

De world largest exchange, Binance dey set de pace for odas to follow, dis time de exchange don mark anoda significant achievement by integrating lightning network to its platform. De feature don go live and users fit log on to deir Binance account and access am thru de deposit and withdrawal section to carry out transactions.

Wetin be lightning network? Lightning network na de layer 2 scaling solution build on top de Bitcoin blockchain to address some of de challenges wey dey plague de base layer network.

The following na de benefits wey Binance users go get for using de lightning network:
1. E dey help increase de number of transaction per second, thus dey reduce de congestion of de network.
2. E dey help make transaction faster as users fit confirm transaction within seconds or milliseconds.
3. E dey attract lower transaction fees and na good opportunities for individuals and businesses to carry out micro-transactions.

Source: https://bitcoinist.com/bitcoin-lightning-network-binance-integration/

[Charles-Tim]

This will help in lightning network adoption. But people should know the difference between 'custodial lightning network wallet and account' and 'noncustodial lightning network wallet'. If it is not your node, it is not your coin. Most lightning network wallets too, like the wallet of Satoshi and many others are centralized means of using lightning network.

3. E dey attract lower transaction fees and na good opportunities for individuals and businesses to carry out micro-transactions.

This is true.

But if you run your own node and open a channel directly with another node, sending bitcoin that way required no fee. Also lightning node runner set the fee for lightning network users that depends on them, the lightning node runner may set the fee to any amount, he may even make transaction fee to be free (0 BTC) if he wants it like that.

4. E dey increase privacy as users fit perform transactions off-chain.

But there is no privacy about this, it is custodial and totally centralized means. Binance still have full control over your coins.

[sokani]

But if you run your own node and open a channel directly with another node, sending bitcoin that way required no fee. Also lightning node runner set the fee for lightning network users that depends on them, the lightning node runner may set the fee to any amount, he may even make transaction fee to be free (0 BTC) if he wants it like that.

Wow... I never knew about this, thanks for this info.

But there is no privacy about this, it is custodial and totally centralized means. Binance still have full control over your coins.

I thought about this too. Not only being in full control of your coins, you're also required to carry out KYC which is giving up your privacy. I've chopped it off.

[Kelward]

Dis na very good news, especially because of em low transaction fee. I know say small business owners like me no fit to easily accept bitcoin as payment for our goods because of the high transaction fees, but as binance don add lightening network, e go reduce high transaction fees, and encourage transactions between buyer and seller for binance. Aldo di lightening network, de complex for me to understand, hopefully e go de more simplified for binance.

I no too understand di different kinds of lightening networks, wey @charlestin de explain, but dat one no go be problem, na to research and understand am better.

[Charles-Tim]

Aldo di lightening network, de complex for me to understand, hopefully e go de more simplified for binance.

On Binance, it is just like on the wallets which you do not need to have your own lightning node or to create a channel, you will not do that and that is why they are centralized. All you have to do is to click on receive or deposit and an invoice would be generated for you, which you can send to someone that wants to send you bitcoin through lightning network. If you want to transfer bitcoin to someone, the receiver will send you an invoice which you will use for the payment.

[Coyster]

This one na better news for people wey dey use Binance, i know say Binance get their drawbacks wey mostly concern privacy, but person wey don already register for the platform no suppose bother about that one because them no get privacy again, so i no see any wahala if a Binance customer use the lightning network on the exchange.

E get plenty people wey been dey criticize Binance say dem never add Bitcoin lighning network as part of the services wey dem dey offer, so e good as dem add am, and i believe say now wey Binance don add am, many exchanges go also try add am in the future.

[sokani]

I no too understand di different kinds of lightening networks, wey @charlestin de explain, but dat one no go be problem, na to research and understand am better.

I know say charles-tim don reply you but I just wan add say de one wey him dey talk na LN for wallets like electrum.

E get plenty people wey been dey criticize Binance say dem never add Bitcoin lighning network as part of the services wey dem dey offer, so e good as dem add am, and i believe say now wey Binance don add am, many exchanges go also try add am in the future.

Kraken, OKX, Bitfinex na some of de exchanges wey don already dey support lightning network, so na beta development say de world's largest exchange don follow suit. De integration of LN go benefits Binance users and maybe increase their user base. From de reaction of de news from some of their users, I come realize say e get some people wen dem wan send small amount of bitcoin to anoda exchange, dem dey like convert am to anoda coin wey d withdrawal fee dey minimal like TRX before dem send am, and trade am back to BTC wen de deposit successfully reach de exchange. But with de integration of LN and as many exchanges begin to support am e go help users to swiftly withdraw and deposit BTC.

[Mate2237]

This is gud. But I don't think the way the lighting network works in other non custodian wallets will be the same way Binance will also use it. Binance is a centralized exchange platform which is mainly for business and profit making. So that free transaction that happens in other wallets might not happen in Binance because they need profit in dealings.
And one thing I always afraid of using Binance to send coin is the transaction fee. Their transaction fee na to kill person oboy. But e fit bi sae LN can reduce it.

[sokani]

This is gud. But I don't think the way the lighting network works in other non custodian wallets will be the same way Binance will also use it.

I think de only similarities be say you fit generate invoices wen using either of dem and send BTC from CEX 2 CEX, CEX to non-custodial wallets and vice versa. But LN for non-custodial wallet get im own added benefit or advantage and Charles-Tim don already explain am.

Binance is a centralized exchange platform which is mainly for business and profit making. So that free transaction that happens in other wallets might not happen in Binance because they need profit in dealings.

Any person wey dey run any business na to maximize profits and Binance is no different. De free transaction fee no dey available for Binance and oda CEXs.

One thing I always afraid of using Binance to send coin is the transaction fee. Their transaction fee na to kill person oboy. But e fit bi sae LN can reduce it.

In terms of transaction fees, I feel say Binance dey try wen compared to oda exchanges. I neva really compare de transaction fee with oda exchanges but 0.000002 BTC no bad.

[Charles-Tim]

@Mate2237, sokani

Do not be surprised that some wallets are also making lightning network to be centralized just like with Binance. Example is wallet of Satoshi and many others like that. Even noncustodial wallet like Bluewallet make lightning network possible just like Binance before, until some months ago that you have to run your own lightning node before you can make use of lightning network on Bluewallet. Most of the lightning network wallet that I know are centralized and the node runners are having incentives that they are collecting from people using their wallet, just like Binance. But the fee are little to the extent you do not need to compare.


On OKX the fee was very small before, but when I check it now, the fee is now 0 BTC. But likely this can change at anytime.

[Doan9269]

Binance implementation of the bitcoin lightning network is for their own increased effective use to engage it's users go along with making use of their services in more applicable ways for their clients, this changes nothing from what bitcoin is or increase anything concerning the bitcoin network, Binance is making room for itself through this incorporation, centralized exchanges will always take steps that makes more money into their business than to see the bitcoin lightning serving it's user than they got derved through it, we still have to be very careful in using Binance because it changes nothing from what it has always been.

[Nwada001]

@Charles- Tim, Regarding this lightening network option and all of that, aside from using the centralized exchanges and other custodial wallets, are there any open-source self-custodial wallets out there that support this lightening network, which could be easier for people like me who lack all it takes to configure or run a personal node, as that might require some technical knowledge in order for one to fully set that up?

[Charles-Tim]

The zero fee for lightning network that I saw on OKX made me to transfer (using it) to Binance. It was zero as in is in the image above, but when I filled the invoice, I noticed I have to pay fee for it:



The fee is 0.00001 BTC.

@Charles- Tim, Regarding this lightening network option and all of that, aside from using the centralized exchanges and other custodial wallets, are there any open-source self-custodial wallets out there that support this lightening network, which could be easier for people like me who lack all it takes to configure or run a personal node, as that might require some technical knowledge in order for one to fully set that up?

If you want to be able to open a channel (with another user), I will suggest you to use Electrum.

This thread now lacks illustrative images, but maybe you can still understand how it works from there and you can ask questions on the thread: Electrum Lightning Network walkthrough