Lightning Network is gaining ground. Fast.
LN is the biggest second layer built on Bitcoin to increase its transaction throughput, and it is confidently paving its way.
Arcane Research has recently published an interesting report, which estimated that the number of LN payments has increased x2 since last year, and their volume – x5 ? Wow. But what explains such phenomenal growth ?
??? As the grassroot crypto adoption progresses, Lightning Network becomes an increasingly popular way to transfer bitcoin fast and cheaply to anyone in any part of the globe, provided they have an LN wallet. No Western Union’s up to 20% fees, no 3-5 days banking delay… not even Bitcoin’s up to 10min confirmation time and $1.69 average transaction fee.
? Also, as more services with existing user base integrate LN, more people are exposed to it: last summer Arcane estimated the number of users having access to the LN at 150’000, but with more and more important players integrating it this number has spiked: Salvadoran Chivo Wallet and P2P exchange Paxful account for 10M user accounts, and Jack Dorsey’s Cash App – for 80M.
? Such success naturally drives more nodes to stake their bitcoins and thus increase the Lightning Network’s capacity: it has increased more than three-fold from just above 1k BTC in April 2021 to 3.5k BTC now.
? The Lightning Network ecosystem, apart from the LN nodes itself, also includes wallets, banks, payments solutions, finance and trading tools, rewards and earnings services, gift cards, gaming, streaming and social apps, communities, P2P marketplaces, information services… They all help driving LN adoption, and the LN adoption, in turn, drives more investor interest to the space. Just recently two developers of LN-specific software have completed significant funding rounds: OpenNode – $20M in February and Lightning Labs – $70M in April.
By now it has become pretty clear that Bitcoin is here to stay. Will Lightning Network earn a permanent place by its side?