Payments made with the Lightning Network have doubled
Interest in the Lightning Network (LN) seems to have exploded over the past year. For example, the Arcane Research report indicates that only relatively few users had access to the LN in the summer of 2021. By March 2022, however, more than 80 million had access to the payments solution on an installed app.
As a reminder, the interest of the Lightning Network is that it overcomes the limitations of the Bitcoin network. Thanks to it, users can send a small amount of BTC instantly, with reduced fees. A niche that has allowed it to attract people: the payment volume of the Lightning Network (in USD) has increased by +400% from 2021 to 2022.
Not surprisingly, there was a peak in November 2021, when Bitcoin reached its all-time high of over $69,000. But if you take out the transactions from the exchange platforms, the trend remains the same according to Arcane Research:
“If we exclude deposits and withdrawals to and from trading services, […] we see that all other payments actually fell in November, but have since risen to new highs.”
So this shows that the increase in Lightning Network usage isn’t just based on Bitcoin price changes.
Where are the new users coming from?
The Arcane Research report points out that these new users are, among other things, related to projects that have joined the Lightning Network. In August 2021, there were only 100,000 to 150,000 LN users. That number jumped from October 2021 thanks in part to two factors. The Paxful platform joined the Lightning Network this month. And even more notably, El Salvador adopted Bitcoin as its legal tender, and its official wallet is based on LN.
Since then, there has been a second jump in users, thanks to Cash App. The payment app announced last February that it was now integrating the Lightning Network’s payment solution. Hence the arrival of many users, who are now more than 80 million.
According to the previous Arcane Research report, the number of users could reach 700 million by the year 2030.
The Lightning Network is increasingly present in the broader ecosystem
Another sign of this renewed interest is that funding record after record is being broken, again according to Arcane Research.
“The record for the highest amount raised in the Lightning Network ecosystem has been broken twice in recent months, with OpenNode raising $20 million in February […] and Lightning Labs raising $70 million in April.”
If any further evidence of the project’s buzz was needed, it was noted that it was particularly talked about during the Bitcoin 2022 conference, which was recently held in Miami. It was learned that major retailers such as Walmart or McDonald’s could now review payments made with the Lightning Network, thanks to the Strike wallet.
The Lightning Network, which has been developed in a rather discreet manner for a long time, seems to be coming more and more to the forefront. This shows the continuing attractiveness of Bitcoin, but also the absolute necessity of using scalability solutions for it to be used on a large scale.