Bitcoin: price falls, but Lightning Network grows
Bitcoin: price falls, but Lightning Network grows

Bitcoin: price falls, but Lightning Network grows

By Marco Cavicchioli - 6 Dec 2021

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The price of Bitcoin has fallen significantly in recent weeks. 

After hitting an all-time high of $69,000 on 10 November, the Bitcoin price began a descent that took it below $64,000, then below $60,000, then below $55,000 and finally below $50,000 as of Saturday 4 December. 

Right now BTC is down 30% from its all-time high, and 16% from a week ago, although it is still 151% higher than it was twelve months ago. 

However, what is very jarring in comparison to this decline is the spread of the Lightning Network. 

For example, LN nodes in the last month have gone from 17,800 to 18,900, while channels have increased from 80,000 to 82,700. 

Of course, 82,700 LN channels worldwide is still very few, but at the beginning of the year, it was less than half. So in less than a year they have more than doubled, and in the last 30 days alone they have increased by more than 3%. 

bitcoin fallen
BTC is down 30% from its all-time high

The overall capacity of the network is also on the rise, growing in the last month from just under 3,200 to just under 3,300 BTC, even though it has been falling in the last five days. 

At the start of 2021, capacity was just 1,000 BTC, so in less than a year it has more than tripled. 

It is worth bearing in mind that the use of Lightning Network is only and exclusively for sending BTC quickly and at very low cost for the time being, so its popularity to date is only and exclusively due to the use of Bitcoin as a means of payment. 

When comparing BTC’s overall performance in 2021 on the one hand and LN’s popularity on the other, it seems that the latter’s performance this year is even greater than that of the price. 

According to Bitfinex’s CTO, Palo Ardoino, the problem could be related to the fear that has plagued the digital token industry on a speculative level. 

In fact, he stated: 

“While the speculative nature of the ecosystem remains front and centre in the headspace of many participants, huge leaps have been made in the underlying infrastructure and payment processes. The Lightning Network arguably represents DeFi in its truest form. Unlike many of the non-bitcoin chains that often have a speculative component based upon the appreciation of a protocol’s token, the Lightning Network is all about payments and building services. The network’s quiet but steady growth this year may not have made so many headlines but it demonstrates the increasing strength of the ecosystem and is largely immune from the impact of gyrating prices”.

LN doesn’t actually have its own token, because it is nothing more than the protocol with which BTC can be moved without having to register transactions on the blockchain. It is a tool that can be used with Bitcoin, completely unrelated to speculation on the financial markets. 

The Bitcoin protocol continues to advance powerfully, no matter how much the markets are willing to value BTC. 

Marco Cavicchioli

Born in 1975, Marco has been the first to talk about Bitcoin on YouTube in Italy. He founded and the Facebook group" Bitcoin Italia (open and without scam) ".

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