Lightning has come to Coinbase, courtesy of Bitrefill.
Revealed exclusively to Bitcoin Magazine, the new service, known as Recharge, is the latest addition to Bitrefill’s Thor Lightning service. With it, Coinbase users will be able to easily leverage the full capabilities of the Lightning Network through their Coinbase accounts. This entails sending on-chain bitcoin from Coinbase to top-off Lightning channels on other services and paying invoices directly from a Coinbase account.
Outside of Coinbase, the service will also be available through Bitrefill for any user “à la carte,” Bitrefill COO John Carvalho told Bitcoin Magazine. The company envisions other exchanges integrating the service as well.
Launched earlier this year, Bitrefill’s Thor gives users quick and easy exposure to Bitcoin’s secondary payment network, Lightning. The on-demand service automatically opens a payment channel for you connected to Bitrefill’s Lightning Network node, which in turn provides a routing hub for virtually any other payment channels on the network.
Thor Turbo, the first product rollout for the service, allows users to leverage Thor immediately without having to wait for on-chain confirmations for the bitcoin they send to Bitrefill to fund their Lightning wallet. The trade-off here is trusting Bitrefill to make good on your transaction, but Carvalho told Bitcoin Magazine that it is a chance “to demonstrate that a business with a good reputation has very little incentive not to deliver when a Lightning service is purchased by central means,” concluding by saying it’s a “purchased access” service, not a custodial one.
Treading closely behind Thor Turbo’s heels, Recharge is Thor’s second product, and it comes as part of Bitrefill’s new ThorAPI service. As with Coinbase, any exchange can utilize the service to integrate Lightning directly onto their platforms, whether they have endogenous support for it or not. Carvalho told us that he sees the service unlocking an interconnected web of quick, cheap liquidity between exchanges, similar to Blockstream’s Liquid sidechains.
“We chose to demonstrate this new service by utilizing our pre-existing integration with Coinbase’s API for accounts to show how Bitrefill allows any crypto platform in the world to provide access to the Lightning Network whether they currently support Lightning technology internally or not,” he told Bitcoin Magazine. “Lightning is about to allow exchanges to collaborate on instantly moving BTC over Lightning and to coordinate on the liquidity needed to make that possible. Soon, you will see major exchanges opening ‘fat’ or ‘wumbo’ channels with each other and with Bitrefill to unleash the power of Lightning even further.”
Wumbo, here, refers to the 1 bitcoin payment channels that Bitrefill has been experimenting with in a bid to push the limits of the Lightning Network — what Carvalho himself has playfully branded as #Reckless. The reason it is so reckless is that the Lightning Network’s protocol default for payment channels only allows users to fund them with so much bitcoin (roughly 4-5 million satoshis worth). Seeing as Lightning is still a fledgling technology, any more than this limit is seen as flying too close to the sun, “so only people breaking the rules with you can route larger amounts with you,” Carvalho said.
So, in the future, it’s conceivable that exchanges could open these fat payment channels with each other in order to improve transfer times and costs. In fact, Carvalho revealed that Bitrefill is “collaborating with several exchanges and Bitcoin-focused businesses to create [this] ‘subnetwork’” of Lightning channel liquidity, adding that they’ve been focusing heavily on accommodating wumbo channels to get as much mileage as possible out of each channel.
Carvalho clarified that “this is not a new partnership with Coinbase,” as Bitrefill’s base API has been integrated into Coinbase for some time, giving Coinbase users instant access to use their accounts at Bitrefill. He continued to say that, given Coinbase’s prominence and “lack of official support internally for Lightning services,” this Recharge integration is ideal for showcasing what Bitrefill’s Thor means for the industry’s heaviest hitters.
“[Coinbase is] one of the largest exchanges in the world and has been historically slow at adding the progressive advancements happening on Bitcoin,” he said. “So, we pushed things forward for their customers.
“We think it is a great way to show how, now, any exchange, wallet, or internet-connected platform can integrate with us and have access to Lightning with minimal trust requirements and minimal development overhead.”
Bitrefill CEO/CTO Sergej Kotliar demoed the service on the first day of the Bitcoin 2019 conference in San Francisco. In partnership with the conference, Bitcoin Lightning Wallet for Android and Wallet of Satoshi (with which Bitrefill is now natively compatible), Bitrefill gifted each member of the conference $5 of bitcoin in Thor Turbo channels to use at the event’s Lightning-powered arcade, beer garden and food vendors.
The post Bitrefill Brings Lightning to Coinbase With ThorAPI Kit for Exchanges appeared first on Bitcoin Magazine.