New peaks for Bitcoin (BTC) – Its second layer, the Lightning Network, is experiencing strong growth in capacity, but also in the number of nodes and channels. The network is expected to see significant growth, driven by Twitter and El Salvador.
Nearly 3,000 BTC for the Lightning network: new records for Bitcoin’s second layer
According to The Block, the capacity of the Lightning network has reached an all-time high around 2,955 BTC. The network has been experiencing strong growth since January 2021.
Data from Glassnode in its September 27, 2021 newsletter The Week on Chain shows a 160% increase in the number of nodes on the network, with a record high of 15,600, during September 2021. At the end of August 2021, the Lightning network had “only” 6,000 nodes.
Glassnode data also reveals that the number of channels or connections between nodes peaked at 73,000, averaging 4.6 channels per node. Growth has accelerated since May 2021:
“This is about double the number of channels that were live during 2019-20, with most of this growth occurring since May 2021.”
Lightning network explosion in sight: support from 2 giants to further accelerate network adoption
The growth of the Lightning network is expected to accelerate with the recent entry of Bitcoin into Twitter. Twitter product manager Esther Crawford announced on September 23 the arrival of Tips on the network, a feature that allows users to send tips in Bitcoin via the Lightning network to their favorite accounts.
The development of the Lightning network is also supported by an entire country. El Salvador’s official Bitcoin wallet, Chivo, uses the Lightning Network for transfers.
The Lightning network plays an important role in the scalability of Bitcoin. Over the years, Bitcoin has gained the status of a reserve asset, an inflation hedge asset comparable to gold rather than a currency. The Lightning network will become increasingly important as Bitcoin gradually returns to its basic function as a cryptocurrency for decentralized P2P transfers.