An introduction to the Lightning Network and guide to using it on OKCoin for instant bitcoin transactions with 99% lower fees.
Earlier this year, we announced our plans to integrate the Lightning Network into OKCoin, allowing for cheaper and faster BTC transactions for our customers. Today, we are thrilled to announce that OKCoin has successfully integrated Lightning for deposits and withdrawals from our platform. In other exciting news, we’re also announcing the latest recipient of the OKCoin Bitcoin Developer Grant — Antoine Riard — who also just so happens to focus on Lightning development.
What is Lightning and how does it work?
The Lightning Network is what’s known as a Layer 2 protocol, developed to solve the potential scalability roadblock of Bitcoin. Currently, bitcoin can only process seven transactions per second (TPS), while the Lightning Network can handle thousands of transactions per second TPS, potentially scaling to one million TPS.
Lightning is able to handle a much higher TPS because it functions off-chain, on top of the main Bitcoin blockchain layer, where on-chain transactions take place. Transactions on Lightning are almost instantaneously sent back and forth off-chain, before being added to the Bitcoin blockchain.
The Lightning Network — which also operates via many separate nodes — about 9,000 at the time of writing, one of which is now run by OKCoin — is designed to allow for fast transactions with lower fees, making it ideal for sending small amounts of BTC, or micropayments. Currently, on-chain transactions on Bitcoin can be relatively slow and expensive, with transaction fees averaging at about $14 at the end of February. Average confirmation time for a Bitcoin transaction on-chain stands at about 10 minutes, but often can take up to an hour to be considered securely confirmed after multiple block confirmations.
BTC transactions via the Lightning Network, on the other hand, are confirmed in just seconds, while fees average at less than $0.01.
As of today, OKCoin customers will have the option to use the Lightning Network for BTC transactions via both the OKCoin website and mobile app. By becoming part of the Lightning Network, we’ve reduced our current minimum deposit/withdrawal limit from 0.001 BTC (~$49) to 0.000001 BTC (~$0.05), significantly increasing convenience and expanding access to the OKCoin platform. Given that use of the network is targeted toward making small transactions possible and efficient, we’ve also instituted a maximum transaction limit of 0.05 BTC (~$2,450) when using the Lightning Network via OKCoin.
How to use Lightning on OKCoin
Below we’ll walk you step-by-step through the process of using the Lightning Network on OKCoin and enjoying super fast transaction speed with very low fees.
Depositing BTC with Lightning
To deposit BTC on OKCoin with Lightning, you’ll need to first make sure you logged in to the platform and have completed identity verification on OKCoin, as you would for any deposit.
Once you’re in, navigate to Assets in the top right corner of your screen and click Deposit. Then select the cryptocurrency you’d like to deposit on OKCoin — in this case Bitcoin.
Once you’ve selected BTC, you’ll see an option to select a deposit method — select Lightning Network.
From there, you will need to select which account you’d like to deposit the funds into and enter the amount of BTC that will be deposited into your account. If you’re ready to start trading, you should select Spot Account, or another trading account.
You can deposit between 0.000001-0.05 BTC on OKCoin via the Lightning Network. From there, click Create invoice to generate an invoice, which will be used to complete the deposit.
The next step will be to take the invoice generated on OKCoin and paste it into the wallet or application you’re sending from.
That’s it! That’s all you need to deposit BTC with Lightning.
Withdrawing BTC with Lightning
In order to withdraw BTC from OKCoin via the Lightning Network, you’ll need to generate a Lightning invoice from the platform or wallet where you want to send BTC from OKCoin.
Once you have your Lightning invoice, navigate to Assets on OKCoin in the top right corner, and then select Withdrawal from the dropdown menu. Nоw select BTC as the currency you’d like to withdraw and select Lighting Network as the withdrawal method.
From there, enter your Lightning invoice generated by the receiving wallet. The amount and service fee will then be automatically confirmed.
Next, click Continue to finalize the withdrawal.
Try Lightning today and start saving time and fees. Deposit BTC.
You can find the public information on the OKCoin Lightning node here.