Bitcoin Lightning Network growth is organic, coming from real-world adoption

Bitcoin’s Lightning Network (LN) capableness precocious surpassed an all-time precocious of 5,000 BTC. 

The Lightning Network is simply a neutral protocol built connected apical of Bitcoin and presently it does not person a “native” token attached to it similar galore decentralized concern platforms.

Although the Lightning Network’s full liquidity is little than 0.5% of the ETH successful DeFi contracts, the uptrend successful Bitcoin’s LN capableness versus a downtrend successful the magnitude of ETH locked successful astute contracts is encouraging for LN development.

Total ETH locked successful DeFi contracts (top) and full BTC successful Lightning Network channels (bottom). Source: DefiLlama

While the liquidity connected the LN has been rising consistently, the fig of channels connected the peer-to-peer web dropped drastically successful November pursuing the FTX collapse. It could beryllium owed to an exodus of miners operating LN nodes too moving mining clients.

However, the apt end of miner capitulation and the emergence of Bitcoin-based applications similar NFTs could people an extremity to LN transmission capitulation. Since the commencement of 2023, implicit 2,000 caller channels person been added to the network.

Lightning Network fig of channels. Source: glassnode

A Valkyrie Investments study stated that LN adoption was picking up velocity successful emerging markets similar South America and Africa, chiefly owed to efforts of the LN mobile outgo application, Strike.

In December 2022, the steadfast launched an LN-based remittance service successful Africa. The work offers no-cost transfers from the U.S. to Africans successful Nigeria, Ghana and Kenya. Later, Strike announced a akin programme successful the Philippines.

LN capableness and important chronological events. Source: Valkyrie

More recently, the steadfast announced dollar payments utilizing LN, wherever users tin perchance nonstop dollars from the Strike’s currency equilibrium to savings and VISA-enabled accounts. The app volition person USD to BTC successful the inheritance and person to USD astatine the destination. Since LN is accelerated and cheap, the hazard owed to Bitcoin’s terms volatility is minimal.

The outgo of planetary payments from the U.S. tin emergence arsenic precocious arsenic $45 per transaction, with transfers taking hours oregon sometimes days. Thus, users could commencement preferring Strike-based payments implicit accepted remittance channels.

A caller study from Marty Bent found that the LN payments person risen this twelvemonth connected the apical Lightning Network wallets, Wallet of Satoshi. Moreover, a podcasting platform, Podcasting 2.0, that accepts LN payments besides recorded an uptick successful tips sent to creators.

Related: Retail elephantine Pick n Pay to judge Bitcoin successful 1,628 stores crossed South Africa

Nostr is boosting LN adoption

Another origin influencing the adoption of LN is the motorboat of Nostr. According to the protocol's Github page, Nostr is simply a simple, unfastened protocol that enables global, decentralized and censorship-resistant societal media. The protocol allows societal media applications to beryllium built connected it.

Damus, a Twitter lookalike, implements Nostr with an IOS and Android application. The thought of an unfastened and escaped societal media web reverberates the strongest successful the crypto space. Bitcoin pioneers similar Jack Dorsey and Adam Back person powerfully endorsed Nostr.

Besides similarities successful ideology, Nostr tin boost LN adoption arsenic Damus has integrated assorted LN wallets similar Wallet of Satoshi, Strike, BlueWallet, and others. A study from LN analyst, Kevin Rooke, cited that implicit 600,000 users signed up connected Nostr. This could assistance onboard users to LN arsenic Nostr inherently supports the Bitcoin outgo web done Nostr Zap.

The Lightning Network is simply a neutral protocol built connected apical of Bitcoin, with nary token attached to it, avoiding speculation. There is simply a imaginable for output for LN nodes arsenic fees for facilitating transactions and providing liquidity. However, successful the existent state, the net are negligible. Hence, the Lightning Network's maturation appears integrated and well-positioned to go the starring planetary outgo network, which salient personalities successful this abstraction person predicted.

The views, thoughts and opinions expressed present are the authors’ unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.

This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.