Today, Kraken announced forthcoming 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 regarding Kraken’s intentions to implement Lightning in 2021.
“Kraken is growing a lot, we are hiring a lot, we are also looking to take on new technological challenges, and also create new features that are going to create value for our users. One of those that we are announcing today is that we will be launching support for Lightning in the first half of 2021” Rochard said.
Rochard believes that Lightning will enable Kraken to greatly improve its customer experience when it comes to both depositing and withdrawing bitcoin. Today, Kraken requires three confirmations (taking about 30 minutes) to deposit and charges a flat fee of $10 for withdrawals. With Lightning, deposits are settled nearly instantaneously and fees reduced close to zero.
“In both cases, we are talking about orders of magnitude of improvement both on the speed and on the efficiency of the transfer of bitcoin and Kraken thinks this is going to open up a lot of really cool use cases.” said Rochard.
Kraken will begin its Lightning support with API access-only withdrawals, followed by user-interface access withdrawals and, finally, deposits.
Kraken is building out a dedicated Lightning team to build and manage its Lightning-related infrastructure.
Rochard is calling for folks with a deep understanding of Lightning and front-end engineering to come help build the Bitcoin ecosystem with Kraken.
When asked whether Kraken’s dedicated Lightning team will be contributing to open-source Lightning development, Rochard responded that, “Part of our thinking is that we are going to likely be one of the largest users of the Lightning Network. We are going to face unique challenges related to scaling Lightning nodes and delivering a seamless user experience. That's why we want to have a dedicated team that can have the engineering talent to contribute upstream to open source, but also maybe we will start some open-source projects of our own and we will find ways we can contribute to the ecosystem in a really strong way. But we really want to start by very humbly sending sats back and forth.”
Rochard believes that there will be very strong incentives pushing exchange and large trading desks onto the Lightning Network.
“If we look at the on-chain data for Bitcoin we see a lot of transitions going from one exchange to another,” he said. “It would really improve the exchange industry as a whole if we move to a net settlement process which implies one transaction batching up many transactions. Lightning provides that for free basically 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 that exchanges will be interested in building on Lightning cryptographic guarantees and invites any member of the greater exchange space to collaborate with the Kraken Lightning team to help increase Lightning adoption and ultimately the adoption of cryptocurrencies.