/biz/ - Business & Finance

Coinbase may market their Lightning-enhanced custodial Bitcoin accounts as a solution. In these accounts, Coinbase can make real Lightning transactions on behalf of their customers; from a single Lightning leaf-node dedicated for use by all their customer accounts. Coinbase can market these four huge advantages above individual Lightning connections:
Coinbase can maintain a highly capitalized connection to the LN to cover the spending of its customers. As with any other channel, this will need to be re-funded on occasion. However, this wouldn’t need to happen anywhere near as often as would be required for all individual channels if each customer had their own connection to the LN. So, on aggregate, channel-funding costs would be significantly smaller in this setup. Also, as the channel-funding is not specific to any one customer, Coinbase themselves would bear the mining cost of these operations.
Given that Coinbase’s customers would only be using an allocated slice of Coinbase’s own LN wallet, there is no requirement at all for customer to add their own funds to the account up-front. Instead, customers could simply establish their account, and then start receiving payments in through the LN, or add to its balance by sending Bitcoin directly to Coinbase (along with the appropriate account information).