Home crypto news Bitcoin Lightning Network Surges Upwards

Bitcoin Lightning Network Surges Upwards

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The Lightning Network is a layer 2 solution which provides instant peer-to-peer payments for almost no cost on top of the Bitcoin network. When comparing the Bitcoin network to the current banking network, one may think of Bitcoin as SWIFT or Western Union while Lightning is more akin to Visa and Mastercard since daily purchases are possible with participating merchants who accept Lightning.

While Bitcoin’s price has not recovered to its $69,000 all time high from November 2021, Lightning adoption has only increased since then. Currently 3,550 Bitcoin are locked in Lightning. This is an 11% increase from 3,187 locked Bitcoin in November despite the 50% drawdown in price since then. It is important to note that the chart below only displays the public channels and not the private ones. We may assume that the number of locked Bitcoin is higher than reported.

Source: glassnode

The number of Lightning nodes has also increased at a similar pace. In November of Bitcoin’s all time high, 17,635 Lightning nodes were online and today there are around 20,412 Lightning nodes (a 15% increase since Bitcoin’s all time high price). 

Source: glassnode

Possibilities For Why Lightning Is Growing

Increased Lightning adoption may be from on-ramps for new users. On-ramps can be found on exchanges or other platforms that provide their users with access to Lightning for withdrawals and payments. The Hong Kong exchange AAX now offers Lightning transactions for over 2 million customers. While this lone company is most likely not the only reason for the increase in Lightning capacity, it is a good example of where growth is coming from.

Another possibility for an increase in Lightning adoption is nation-state adoption. Prior to El Salvador’s announcement for Bitcoin adoption as legal tender, Lightning adoption ramped up significantly as Strike (Lightning payments company) was also experiencing huge user growth. There is no confirmation that another country is currently adopting Bitcoin but locations like MalaysiaMexico, various states in the U.S., and Lugano, Switzerland have recently reported that Bitcoin legislation is being developed.

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Deniz Saat is an IT services specialist, technical writer and editor for BTC Times. His mission is to onboard as many people as possible into the Bitcoin overlay through education and content creation.

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