Top cryptocurrency exchanges Coin base is rolling out support for the Bitcoin Lightning Network, the company said on Tuesday. Progressively available on mobile and desktop platforms, Coinbase users will be able to choose between sending Bitcoin using the Bitcoin mainnet or the Lightning Network.

Launched in 2018, the Lightning Network is a layer 2 protocol built on top of the Bitcoin network. The Lighting Network allows users to move Bitcoin between wallets without the need to interact directly with the Bitcoin blockchain.

Facilitating Coinbase’s Lightning Network integration is based in Los Angeles Lightpark. Founded in 2022, the company offers Lightning Network products aimed at businesses.

“There are a few considerations we kept in mind when determining the best way to add Lighting support,” Viktor Bunin, protocol expert at Coinbase, told Decrypt.

“The first thing is we decided to use a non-custodial integration partner, because when you look at the design of Lightning, it has this optimization component,” Bunin said. “The second thing is when we think about the distribution of functions, it makes sense for Coinbase to focus on the security and the user experience part, it makes sense to outsource that.”

Coinbase customers interested in using the Lightning Network can switch between Bitcoin Core and Lightning Network by entering the amount of Bitcoin they want to send. They will then need to include a Lightning “invoice” address, which would be generated by the recipient.

“Customers will interact with Lightning from our retail exchange, and this is custodial, the same way you custody Bitcoin, ETH and other assets with Coinbase,” Bunin said.

“Customers don’t need to run a node, manage a channel or worry about liquidity,” he added. “Coinbase and Lightspark manage all these different aspects, and Coinbase manages the keys and security, as we always do.”

San Francisco-based Coinbase was Exploring Lightning Network Integration since last fall. The hardest part of integrating the Lightning Network into Coinbase, Bunin recalled, was helping the Coinbase team understand how the technology works – particularly in relation to channel management and fund movements.

“Ensuring that everyone in the company who was working on this project had a deep understanding of the Lightning Network – how it works and impacts their responsibilities – was really crucial,” he said.

Although Coinbase has met with different Lightning Network providers, Bunin said Lightspark fits the bill, offering all the features they were looking for.

“We chose a partner that has a proven track record of working with enterprises on large-scale Lightning deployments, and Lightspark met our high security standards,” explained Bunin. “They are non-custodial, as I mentioned, and have a clear vision for how they can continue to support and improve the lightning ecosystem in the long term.”

He said the integration of the Bitcoin Lightning Network ultimately aims to increase crypto adoption and increase economic freedom.

“Bitcoin is the most important asset in crypto, and when we think about how we can promote decentralized, permissionless, credibly neutral networks and assets, how can we get assets on these networks as close as possible to one-second, one-cent transfers and possible transactions, Lightning made a lot of sense,” said Bunin. “Advancing Bitcoin is something that is good for Coinbase, good for the industry and good for the ecosystem, and we are very proud to have the opportunity to do that.”

According to Bunin, although the Lighting Network option is available to US-based customers, Canadian and New York residents will not be able to take advantage of the Lightning Network function for now.

Meanwhile, Coinbase has been locked in a legal battle with the US Securities and Exchange Commission since the agency began investigating Coinbase for allegedly allowing customers to trade unregistered securities in 2022.

In March, a federal judge said the S.E.C. lawsuit could move forward, saying the regulator’s argument against the exchange was plausible, rejecting Coinbase’s motion to dismiss.

Seeking to swing Congress in favor of crypto, Coinbase supported policies campaigns aiming for the 2024 US elections. In February, a Coinbase-backed SuperPAC called Fairshake PAC launched a massive ad campaign targeting the US Senate candidate Katie Porteran ally of longtime crypto critic US Senator Elizabeth Warren.

Editor’s note: This story was updated after publication to clarify that Lightning Network support is being rolled out progressively rather than immediately to all US users.

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