Chainalysis, a blockchain platform, now offers compatibility with the Lightning Network.
The technology company Chainalysis has announced its support for the Lightning Network, a second-layer protocol built on top of the Bitcoin blockchain. This integration aims to improve the compliance and security of Bitcoin transactions, making it more accessible for businesses to handle Bitcoin payments.
The Lightning Network, which launched in 2018, is designed to enable faster and cheaper Bitcoin price today transactions compared to traditional methods. It allows users to send and receive smaller payments like tips and remittances more quickly and scalably using Bitcoin. The network is a decentralized mechanism for making quick, high-volume micropayments without entrusting money to third parties, built on top of the Bitcoin blockchain.
Since January 2021, the number of active nodes on the Lightning Network has increased by 128 percent. This growth can be attributed to several factors, including the Salvadoran government's adoption of Bitcoin as legal tender and Twitter's integration of Bitcoin for its tipping feature.
Chainalysis KYT, a compliance software designed to help businesses meet regulatory requirements, will pre-screen Lightning Network withdrawals and behavioral alarms. This integration allows companies handling Bitcoin price usd payments through Lightning nodes to use Chainalysis KYT compliance software, ensuring they adhere to international standards.
Virtual asset service providers (VASPs), such as exchanges, will now be able to process Bitcoin price transactions in accordance with these standards. VASPs are businesses that facilitate transactions involving virtual assets, such as Bitcoin.
Pratima Arora, Chainalysis chief product officer, stated that the Lightning Network solves many challenges that prevent Bitcoin from being used for micropayments and other transaction types that bolster financial inclusion. She added that this integration is a significant step towards making Bitcoin more accessible and secure for businesses.
In a related development, BitScaler, a Bitcoin infrastructure provider, announced on December 1, 2021, that it has integrated the Lightning Network. This move reduces Lightning Network fees by up to 90% using AI-based routing for optimal trading prices. As of December 1, 2021, approximately 3,600 BTC worth over $205 million is locked in public Lightning Network channels.
The Lightning Network's popularity and adoption have grown significantly in 2021, making it the most adopted year since its inception. This integration with Chainalysis is expected to further boost its growth and scalability, making Bitcoin transactions more secure and compliant.
The integration is set to be available for Chainalysis KYT users starting in February 2022. As the world continues to embrace digital currencies, this partnership between Chainalysis and the Lightning Network is a significant stride towards a more secure and compliant business environment.
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