Lightning Network’s (LN) capacity exceeded 1,500 BTC for the first time.
It's Lightning SZN ⚡️
– Lightning network capacity just broke 1,500 BTC
– Network nodes, channels, and capacity are at all-time highs
– The two most popular Finance apps in El Salvador are Lightning enabled Bitcoin wallets pic.twitter.com/AV6p8V0SiP
— Kevin Rooke (@kerooke) June 13, 2021
“Capacity” refers to the volume of bitcoin that has been placed on the LN network in total, and which can therefore be exchanged within this network.
Already in March 2019, the 1,000 BTC mark was exceeded for the first time, but at that time, a bitcoin was only worth a little more than $4,000, so the total value of the BTC put on LN was only slightly more than 4.5 million.
However, now with the value of BTC at around $39,000, those 1,500 BTC put on LN have a total value of almost $60 million, which is more than ten times the value in March 2019.
To be fair, in October 2019 the BTC put on Lightning Network had fallen to around 800 overall, but since then a slow ascent began, leading to a new breach of 1,000 in August last year, and then a boom that began in March this year.
In practice, within just three and a half months, Lightning Network’s capacity has increased by 34% in BTC.
Why has Lightning Network’s capacity increased?
This could be a consequence of the increased use of the LN network, which allows for immediate and inexpensive BTC transfers, as opposed to traditional on-chain transactions which are slow and expensive.
In particular, what is happening in El Salvador, regarding remittances in BTC sent by Salvadoran immigrants to their relatives back home, is linked to the use of LN, which can only grow in this context.
Moreover, after bitcoin was declared legal tender in the country, some citizens may also want to use it for common payments, and for these, it is much better to use LN rather than normal on-chain transactions. Finally, it should be noted that there are now many bitcoin wallets that support the Lightning Network.
In fact, the two most popular finance apps in El Salvador are LN-enabled bitcoin wallets.
At this point, it is no coincidence that the number of LN nodes, and open channels, are also at an all-time high.