Many crypto exchanges are now working toward integrating the Bitcoin Lightning Network into their platforms, aiming to reduce transaction fees and processing times. Data shows that BLT relies on several centralized cloud services, such as Amazon Web Services (AWS) and Google Cloud, for data processing.
But, why would decentralized crypto institutions opt for centralized cloud services as the basis of their token transactions?
Data from Mempool shows that BLT relies in the capacities of 19% on Google Cloud and 29% on AWS for transaction processing. DataWeb Global Group also carries over 12% of BLT’s load.
The reliance on such cloud services aims to avoid risks posed by depending on individual BLT nodes.
Through the Bitcoin Lightning Network transactions can take place in a decentralized manner if both parties involved are online. Should one of the parties go offline, funds may be lost in the process.
By relying on centralized cloud services such as AWS, such risks can be mitigated as the platform handles transaction data instead.
A form of company is now emerging in the crypto space called Lightning as a Service (LaaS). Among the prominent names in the LaaS industry is Voltage.
Google recently announced its partnership with Voltage to offer “enterprises with a Lightning Network solution that enables the settlement of real-time payments with near-zero fees, enabling organizations to send and receive payments while creating new experiences and business models.”
The announcement states that “Voltage is working with Google Cloud to expand hosting providers and locations. Through this collaboration, customers can create Bitcoin and Lightning Nodes in Google Cloud at various locations worldwide. Customers can deploy their workloads globally via two leading providers using Voltage and Google Cloud.”
Finally, the announcement clarifies the purpose behind the partnership, claiming that it would:
CCN reached out to Voltage for commentary but did not receive a reply at the time of publishing.
Last month, the world’s leading crypto exchange, Binance, announced the integration of BLT into its platform in an effort to reduce transaction costs and processing durations.
Following suit, Coinbase, the biggest US-based exchange also announced its plans to integrate BLT into its platform. The announcement came after Twitter co-founder Jack Dorsey asked Coinbase’s CEO, Brian Armstrong, why the company hadn’t made the move yet.