Today, Kraken announced new features designed to bring the benefits of Bitcoin’s Lightning Network to its global exchange in the first half of 2021. Pierre Rochard, Bitcoin strategist at Kraken, sat down with Bitcoin Magazine for an exclusive interview about Kraken’s intentions to implement Lightning in 2021.
“Squatting is growing enormously, we are hiring a lot, we are also looking for new technological challenges and also to create new functions that will create value for our users. One of these we are announcing today is that we will be launching support for Lightning in the first half of 2021, ”said Rochard.
Rochard believes that Lightning will enable Kraken to significantly improve its customer experience when it comes to both depositing and withdrawing bitcoin. Today, Kraken requires three confirmations (which take about 30 minutes) to deposit and charges a flat $ 10 fee for withdrawals. With Lightning, deposits are settled almost immediately and costs are reduced to almost zero.
“In both cases, we’re talking orders of magnitude of improvement, both in terms of the speed and efficiency of bitcoin transfer, and Kraken thinks this will open up a lot of really cool use cases.” Rochard said.
Kraken starts its Lightning support with withdrawals for API access only, followed by withdrawals for user interface access and finally deposits.
Kraken is building a dedicated Lightning team to build and manage its Lightning-related infrastructure.
Rochard is calling on people with an in-depth understanding of Lightning and front-end engineering to come and help build the Bitcoin ecosystem with Kraken.
When asked if Kraken’s dedicated Lightning team will contribute to the development of open source Lightning, Rochard replied, “Part of our thinking is that we will probably become one of the largest users of the Lightning Network. We face unique challenges in scaling Lightning nodes and delivering a seamless user experience. That’s why we want to have a dedicated team that can have the technical talent to contribute to open source upstream, but maybe we’ll also start some open source projects ourselves and find ways to contribute to the ecosystem in a really strong way. But we really want to start by sending sats back and forth very humbly. “
Rochard believes there will be very strong incentives to push exchanges and large trading desks to the Lightning Network.
“When we look at the on-chain data for Bitcoin, we see a lot of transitions from one exchange to another,” he said. “It would really improve the forex industry as a whole if we move to a net settlement process where one transaction bundles many transactions. Lightning offers that for free, in the sense that we can open a channel between Kraken and another exchange and then we can keep that channel open forever. “
Rochard believes exchanges will be interested in building on cryptographic guarantees from Lightning and invites each member of the larger exchange space to partner with the Kraken Lightning team to help increase adoption of Lightning and ultimately the adoption of cryptocurrencies .