Bitmex opens a lightning node
As development of the second layer protocol trudges alone, we are now seeing an increasing amount of nodes coming online. It was recently reported that in the month of July alone, there was an 85% increase seen in node growth. News has now broken that centralized exchange, BitMex, has launched their very own Lightning Network node.
This node will be used to test the functionality of deposits and withdrawals on the platform. Initial functionality will be limited however, with these features coming at a later date. For now, users can open a channel with the BitMex node. The company announced the development in a recent tweet:
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
With this, there has already been multiple nodes come online that utilize the name BitMex. In their tweets, they stress that any other using their name has no affiliation with the exchange, and to use caution when opening channels with them.
Will other centralized exchanges jump on board?
Due to KYC requirements becoming more stringent, and authorities cracking down on centralized exchanges, it remains to be seen if many will activate the Lightning Network. Industry guru, Andreas Antonopoulos, touched on the subject in a podcast a few months ago. In the discussion he stated, “They have a fully KYC/AML-ed customer on one end of their connection, but if they receive a payment that’s going to that customer over the Lightning Network, they have no idea whether that customer’s the final destination… If they receive one coming in from that customer, they have no idea if that customer’s the origin… Which means their KYC just fell apart – completely fell apart.”
It is due to these potential concerns that the BitMex node is both surprising and encouraging. Clearly big exchanges do not want to miss out on the functionality that the lightning network will afford them. This is leading to Lightning Network adoption, despite these concerns.
Bitmex & market shorts
The name BitMex has been in the news of late, not just for positive developments. During a recent scheduled maintenance shutdown, many users lost vast sums of money. Due to a glitch in their system, trading was able to continue during the maintenance. Users, however, were not able to access their accounts during this time. Due in part to a DDOS attack that extended the downtime, many user’s margin-shorts were liquidated during this time. This resulted in up to 60% losses for many users of the platform.
Overall, despite the negative news regarding the BitMex DDOS attack, overall sentiment regarding the exchange is positive due to the creation of the Lightning Network node. Now that this exchange has taken the leap into the world of the Lightning Network, other exchanges will be watching intently. With the resources they hold, many believe that centralized exchanges will play a pivotal role in establishing the Lightning Network during its early days.