The Bitfinex exchange , which has been accepting Lightning transactions since December 2019, takes a new step by allowing users to transact over the 0.1677 bitcoin limit or open Lightning channels from a capacity of up to 2 bitcoins. Certain Lightning clients, notably LND, have recently made it possible to exceed the initial limit to create much larger channels (the “Wumbo channels”).
When the Lightning Network launched, the developers of the protocol imposed a hard limit on the maximum capacity of payment channels. This cap was then intended to protect users against unforeseen bugs or errors that could occur in this nascent network during the development phase of the various implementations. As the network matures, major implementations of the Lightning Network protocol have moved to remove this hard limit on channel capacity, paving the way for channels that allow much larger transactions.
Bitfinex sees huge potential in these channels, so they have decided to support Wumbo channels on their Lightning nodes. Wumbo channels will allow Bitfinex users to deposit and withdraw large amounts of Bitcoin quickly and cheaply, thus taking advantage of new trading opportunities. This will also enable merchants and service providers to build innovative new applications and sell high-value goods and services on the Lightning Network. The general public will thus be able to open channels with a capacity of up to 2 bitcoins with one of their nodes. This capacity will rise to 5 bitcoins for businesses and wallet providers such as Bitrefill, LnMarkets and Lightning Labs.
This is a big step forward towards Bitcoin's goal of scalability through adoption of the Lightning Network.
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