• The Lightning Network expands in capacity by over 70% in less than two months, fueling Bitcoin's scalability.
  • The number of nodes on the Lightning Network is likely higher since it is estimated that 27.8% of all Lightning Network channels are unadvertised.
  • Lightning Network solves the security, decentralization and scaling challenge on the Bitcoin blockchain.

The Lightning Network, Bitcoin's scaling solution, has witnessed a surge in growth in capacity. It has climbed from 1,800 to 2,300 BTC in nearly two months. The network's capacity has doubled since 2020, scaling Bitcoin's blockchain further. 

Lightning Network intends to scale beyond 1 billion adopters

The Bitcoin Lightning Network's growth is explosive since the beginning of 2021. Based on data from TxStats.info, an independent project with the collaboration of Coin Metrics and BitMEX Research, the lightning network mainnet has grown in terms of Bitcoin held and a number of open channels. 

State of the Lightning Network

State of the Lightning Network.

Lightning Network channels allow two parties to transact on the Bitcoin blockchain through the layer-two solution. When a transaction is initiated between a sender and a receiver (two nodes in the Lightning Network), a channel is opened. The transaction is processed in a completely different manner compared to the one on Bitcoin's blockchain. 

Either one of the two users can open a channel, and their funds will then be locked on the Bitcoin network and made available on the second layer or Lightning Network. Once both users have completed the transactions, they can close the channel, and that is when the transaction will be settled on the Bitcoin blockchain with the closing BTC balance of both users. 

Much of the rise in the number of open channels and nodes on the Lightning Network is attributed to the last two months. In nearly 60 days, the number of open channels has hit 66,839, up 36% since June 2021 and 76% year to date. 

Lightning Network nodes, or "gateways" to the network, monitor the underlying Bitcoin blockchain and interact with other nodes to fulfill transactions. Currently, the number of visible nodes on the network is 25,371. 

The Lightning Network may be larger than the visible nodes like an iceberg since nodes may operate privately in "unadvertised" channels, and statistics capture only public channels. It aims to scale use cases that draw more people to the Bitcoin network through international remittances, gaming and the metaverse. 

Ethereum founder Vitalik Buterin's "Scalability Trilemma" states that you cannot optimize for security, decentralization and scalability at the same time. One can only optimize for two out of three properties, so the solution to achieving the third is adding layer two. 

In the case of Bitcoin, the Lightning Network acts as layer two to offer Bitcoin's base layer scalability. The BTC network solves the challenge of decentralization and security. 

A Lightning Network critic on Twitter, behind the handle @brian_trollz, shared his critique on the network's properties in a recent Medium post. He states:

What is the reality of Bitcoin and Lightning right now? Most people are holding Bitcoin, and Lightning as a means of exchange is mostly about being payment rails between non-native Bitcoin payments. This is the cold, harsh reality.

Despite criticism from users like @brian_trollz, the Lightning Network promises to solve the Bitcoin blockchain's scaling issues. Twitter CEO Jack Dorsey has mentioned the possibility of incorporating Lightning Network on the social media platform in the recent past. Dorsey replied to a user's request to incorporate it  with Twitter by saying:

Only a matter of time.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Can the second half of 2022 be kind to SafeMoon price?

Can the second half of 2022 be kind to SafeMoon price?

SafeMoon price shows a bullish outlook that seems too good to be true. Investors that do not practice proper risk management could get caught off guard. 

More SafeMoon News

Cardano price has fallen beneath $0.45, here’s what to expect in July

Cardano price has fallen beneath $0.45, here’s what to expect in July

Cardano price has breached through the 8- and 21-day moving averages. ADA price falls in free-fall fashion printing consecutive bearish candlesticks on the four-hour chart.

More Cardano News

Shiba Inu price shows concerning signals, who will conquer the trend?

Shiba Inu price shows concerning signals, who will conquer the trend?

Shiba Inu price shows concerning signals on the Volume Profile indicator. SHIB price coils within the 8- and 21-period simple moving averages. Invalidation of the downtrend is a breach above $0.00001223.

More Shiba Inu News

XRP Price Prediction: Whales in the market aim for $0.20

XRP Price Prediction: Whales in the market aim for $0.20

Millions of XRP tokens have been transported to the Bitstamp exchange. Ripple’s XRP price has breached below a critical Fibonacci Retracement tool.

More Ripple News

Bitcoin: Everything you need to know about BTC 200-week MA

Bitcoin: Everything you need to know about BTC 200-week MA

Bitcoin price has gone through turbulent times over the last few months. From reaching a new all-time high to hitting yearly lows and revisiting levels since 2020, the crypto markets have been extremely volatile.

Read full analysis

BTC

ETH

XRP