The adoption of Lightning Network as a bitcoin payment system is setting new records.
LN’s Bitcoin payment channels surge
Recently, the network’s capacity expressed in the number of bitcoin locked on the network so they can be exchanged has been soaring.
At the beginning of the year, LN’s network capacity was just over 1,000 BTC, and by the end of April it had increased by 20% to over 1,200 BTC.
However, from May onwards, the capacity of the LN network soared, and by July it had already surpassed 2,000 BTC, arriving at almost 3,000 BTC in the last few days.
The first surge began in July, after it was announced that El Salvador had declared Bitcoin legal tender in the country.
In El Salvador, LN is used to receive remittances from abroad quickly and, above all, at extremely low cost, so it is likely to be the main culprit behind these increases.
The second surge began after 7 September, the date on which Bitcoin became legal tender in the country.
For example, the official LN wallet issued by the Salvadoran government is processing more than 65,000 transactions every second, all on the Lightning Network.
The nearly 3,000 BTC locked on LN to date have a total value of more than $125 million, compared to $29 million at the end of 2020 and even $6 million at the end of 2019.
Using LN channels to make payments
Thanks to the increase in bitcoin’s value, LN network capacity expressed in US dollars has increased by 1,700% over the past year and a half.
The number of active channels on the Lightning Network has also grown, as there are now over 74,000 compared to 37,000 at the end of 2020. This has doubled in eight months.
The fact that capacity has increased as a percentage much more than channels (+200% vs. +100%) probably means that individual LN channels were hardly used at all until last year, whereas during 2021 their use, as well as their number, has increased considerably.
The use of LN channels to make payments on Twitter or Substack may have played a role in this increase in usage, as well as in numbers.
Lightning Network adoption, a point of view
Bitfinex’s CTO, Paolo Ardoino, commented on this trend saying:
“From a purely technical point of view, anyone that has experience and is highly trained in computer science should know that the Lightning Network is the best way to build a high-frequency, robust, and scalable payments system. It comes as no surprise that it is seeing record volumes of usage as it is being implemented in real life use cases such as Twitter. The Lightning Network is one of the most bullish developments that the bitcoin ecosystem has seen so far. It has the potential to increase bitcoin adoption and drive new investment in the space. Furthermore, if we’re talking about DeFi, I believe it will be the right way to build an ecosystem that is actually scalable for mass adoption”.
As of yet, there seems to be no glimpse of any limitations that could halt widespread LN adoption.