The number of nodes present in the Bitcoin Lightning Network has increased by 160% in the last 12 months, while the number of channels has increased by as much as 170% since January 2021. These are record values! So, it can be said that the capacity of the Lightning Network – the second layer solution for the world’s most popular cryptocurrency, BTC – is achieving an almost exponential growth! We’ll talk about what’s happening in the market in the following paragraphs.
What is the Bitcoin Lightning Network?
But let’s start with the basics: what is this second layer solution, namely the Lightning Network? The Lightning Network is based on the Bitcoin (BTC) blockchain, allowing it to send and receive information from the blockchain. This results in the ability to perform cheap and instant transactions, which was previously a big problem with the Bitcoin blockchain. These transactions are carried out by “nodes”, i.e. participants in the network. Nodes open “channels” through which the transaction passes. The more nodes, the smoother the network. Therefore, what is currently happening with the Lightning Network indicates its growing popularity.
An example of an area where the Lightning Network is being used is the situation in El Salvador. El Salvador is in the process of introducing the BTC token as an everyday currency. In this very country, the popular fast food restaurant McDonald’s has introduced the ability to pay for food with just BTC. These payments have to be made instantly and are being made right through Lightning Network.
Lightning Network situation in September 2021
Lightning Network was designed by two programmers, Thaddeus Dryja and Joseph Poon in 2015. It was created as a way to move bitcoin transactions off the blockchain to another location in order to increase throughput and lower the cost per transaction.
As we have previously established, Lightning Network metrics are reaching record highs. The rapid adoption of this solution has resulted in record growth in the number of nodes. In August 2020, their number was 6,000, while 12 months later it rose to as many as 15,600. The number of channels per node has also reached record highs. Currently (September 2021) it is 9.3 per node.
The network capacity is also currently at its highest level ever, as it is 2904 BTC. In September 2021 alone, 22% BTC or 514 BTC was added to the network.
These are very high values that carry one conclusion: the Lightning network is growing incredibly fast and BTC is growing stronger all the time.