BitMEX Research Just Setup A Lightning Network Node
Cryptocurrency exchange BitMEX just setup their first Lightning Network node. BitMEX confirmed the news in a tweet earlier today.
BitMEX Research has set up a lightning network node:
Public Key: 0287416bd553ff2630ff54640e3a7e4230d632387039313bf5a24d7df2006e13c2https://t.co/KEyOfBwiV9
Feel free to open a channel to our node
Deposits & withdrawals are still a long way off, but at least this is a start pic.twitter.com/FkFU1gvYnm
— BitMEX Research (@BitMEXResearch) August 21, 2018
The public key for BitMEX’s LN node is this: 0287416bd553ff2630ff54640e3a7e4230d632387039313bf5a24d7df2006e13c2
You can view the node at 1ml.com here.
BitMEX is welcoming users to open a channel to their node. Deposits and withdrawals are not currently available, but BitMEX describes it as “a start”.
The public address listed above is the only BitMEX Lightning Network node in existence. Any other nodes with BitMEX in their name have no connection to BitMEX and are likely being operated by scammers.
Wider adoption of the Lightning Network is crucial as Blockstream’s scaling solution continues to move forward. It’s also good news for people who predicted that exchanges would become major Lightning Network: with companies like BitMEX establishing Lightning Network nodes, it’s possible other exchanges could follow.
Can You Make Profit From The Spread Between Lightning Network And Non-Lightning Network Bitcoins?
Lightning Network is a controversial scaling solution. It takes bitcoin transactions off-chain for the first time. Lightning Network operates as a side-channel. Transactions take place within the channel without being recorded on the blockchain. The opening of the channel is recorded on the blockchain, but smaller transactions within the vchannel stay within that channel.
This opens up unique new potential for bitcoin. As one Twitter user explained in a reply to BitMEX’s tweet, there’s potential for traders to capitalize on the spread between Lightning Network bitcoins and non-Lightning Network bitcoins.
“I'm just excited to trade the spread between on-chain bitcoins and off-chain LN tokens. Since [they] will have different levels of fungibility, there should be good volatility to play with in a highly liquid futures market like BitMex,” explains Kurt Wuckert Jr on Twitter.
I'm just excited to trade the spread between on-chain bitcoins and off-chain LN tokens. Since the will have different levels of fungibility, there should be good volatility to play with in a highly liquid futures market like BitMex.
— Kurt Wuckert Jr (@kurtwuckertjr) August 21, 2018
“LN tokens can only be sent to LN wallets. Bitcoins can only be sent to Bitcoin wallets. The blockchain has different scarcity & limitations than LN too. Plus LN aims to be almost free, but with finite resources, there will be a fee market there, and plenty of trader opportunity,” he added.
Because of this spread, the Lightning Network will open a unique opportunity on which exchanges like BitMEX can capitalize.
“Anyone with advanced trading experience is chomping at the bit which is why BitMex is getting in on this early. In fact, there are already high level financial instruments being developed to figure out how to make profits from the spread between bitcoin, LN and Watchtowers.”
In layman’s terms, a Lightning Network bitcoin might have greater utility than a non-LN bitcoin. It’s easier and cheaper to transfer, which means it should theoretically be priced higher than a non-Lightning Network bitcoin.
Ultimately, BitMEX is one of the first major exchanges to launch a Lightning Network node. This is great news for BTC fans as their proposed scaling solution continues to roll out.