Bitfinex has launched support for the Lightning Network which is a decentralized system of smart contracts built as a second-layer of the Bitcoin blockchain, enabling custodian-free instant, high-volume micropayments across a network of participants. Bitfinex has started running its own Lightning Network node that traders can connect to and open a payment channel with the platform. “As industry pioneers, we strive to remain at the forefront of Bitcoin technology development,” said Bitfinex CTO Paolo Ardoino. “We’re proud to support the Lightning Network.”
The Lightning Network works by creating a secure network of participants that can transact with each other directly, without having to broadcast everything on the Bitcoin blockchain. The second layer technology uses the blockchain only for final settlement of funds, which takes place when the payment channels are closed.