In Brief:
- Chainalysis announced it is offering support for Lightning Network.
- VASPs will be able to process Bitcoin transactions in accordance with international standards.
- Lightning withdrawals and behavioral alarms will be pre-screened by Chainalysis KYT.
Blockchain data monitoring platform Chainalysis announced it is adding support for Lightning Network, a second layer protocol built on top of the bitcoin blockchain.
Companies that handle Bitcoin payments through Lightning nodes will be able to use Chainalysis Know Your Transaction compliance software as a result of the integration.
It also means that virtual asset service providers (VASPs), such as exchanges, will be able to process Bitcoin transactions in accordance with international standards.
The Lightning Network is a decentralized mechanism for making quick, high-volume micropayments without entrusting money to third parties.
Lightning allows users to send and receive smaller payments like tips and remittances more quickly and scalably using Bitcoin.
Pratima Arora, Chainalysis chief product officer, stated, “The Lightning Network solves many of the challenges that prevent the Bitcoin protocol from being used for micropayments and other transaction types that bolster financial inclusion. By enabling customers to compliantly support Lightning transactions, we hope to grow the network’s popularity and help it scale.”
As of December 1, 2021, a little under 3,600 BTC worth over $205 million was locked in public Lightning Network channels, up from 468 BTC worth around $4.8 million on January 1, 2021, according to Chainalysis statistics.
Lightning withdrawals and behavioral alarms will be pre-screened by Chainalysis KYT. Chainalysis KYT users will be able to use the Lightning Network starting in February 2022.
The Lightning Network, which launched in 2018, has seen more adoption in 2021 than any other year. Since January, the number of active nodes on the Lightning Network has increased by 128 percent, thanks to the Salvadoran government’s adoption of Bitcoin as legal cash and Twitter’s integration of Bitcoin for its tipping feature.
Also Read: Blockchain Data Platform Chainalysis Acquires Excygent
