In another meaningful sign that Bitcoin’s Lightning Network (LN) is gaining serious traction, Chilean Bitcoin exchange Buda recently announced its support of the LN. Buda claims to be the largest cryptocurrency market in South America and was in the news cycle earlier this year following the closure of its account by Chilean banks and the subsequent court order to reopen them.
In the announcement, Buda outlined how users of their exchange can now pay using the LN on their platform through a simple invoicing mechanism.
Major Step Forward
An exchange offering LN payments is significant for several reasons. Primarily, the LN is still developing and, as an experimental network, doesn’t support large transfers of Bitcoin like on-chain transactions yet. There are not many merchants who offer LN support either. Buda explicitly identifies the services that you can use LN payments for through their exchange including:
As a Chilean exchange, the move also represents growth of emerging Bitcoin technologies in areas outside of the main hotbeds of cryptocurrency development such as the U.S. and Southeast Asia. The rise of Bitcoin in Venezuela is well-documented as a reprieve from massive hyperinflation and other countries like Argentina and Chile are also experiencing substantial Bitcoin usage growth.
According to CoinDance, LocalBitcoins weekly Bitcoin volume in Chile is approximately $130 million and Argentina — although much less at roughly $7.3 million — has seen exponential growth in volume since the end of last year. Notably, Argentina is also undergoing some concerning economic developments which have largely attributed to the rise in Bitcoin volumes in the country.
The adoption of LN payments by exchanges has the potential to significantly accelerate adoption by familiarizing many users with the technology. Currently, the LN has a reasonably high barrier to access — particularly for mainstream crypto users — but Buda’s move should help the technology gain some valuable exposure in the South American market.
The Lightning Network has made some noticeable progress since its official launch earlier this year. Developments such as the Casa Lightning Node, LN vending machines, and continued fundraising for developing on the network are all noteworthy steps towards broader adoption. Buda’s announcement is sure to keep fueling the mainstream transition to Bitcoin’s layer two payment network.