The Lightning Network, a layer 2 payment network built on top of the Bitcoin blockchain, has achieved a growth of over 1200% in just 2 years. This marks the potential for Bitcoin to soon become a widely used means of payment.
According to data from Bitcoin, the Layer 2 scaling solution designed to address scalability issues on the Bitcoin network, Lightning Network has seen an estimated growth of 1,212% in 2 years, with approximately 6.6 million transactions routed in August. This is a significant leap from the 503,000 transactions in August 2021.
The Lightning Network is a second-layer payment protocol built on the Bitcoin blockchain, designed to enable fast and cost-effective microtransactions by allowing participants to transact directly without settling every transaction on the blockchain. It operates as a network of bidirectional payment channels between participants, allowing for off-chain transactions to ultimately settle on the Bitcoin blockchain.
It is designed to mitigate issues seen on the main Bitcoin network, such as slow transaction speeds and high fees. The network achieves this by allowing users to open payment channels with each other, enabling the network to handle a large number of low-value transactions without having to broadcast every transaction on the main Bitcoin network.
As a result, the use of Binance’s Bitcoin Lightning nodes to facilitate cryptocurrency transactions remains popular, despite a 44% decrease in Bitcoin price and reduced user discussion in the online space.
Furthermore, according to River, the 6.6 million routed Lightning transactions represent only the minimum value that the company can assess. Lightning transactions are inherently private and challenging to quantify. This implies that the actual processing volume on Lightning is immense.
Wouters shared that Lightning is currently processing at least 47% of Bitcoin’s online transactions, with an average transaction scale of $11.84 per day. With 279,000 to 1.1 million regular Lightning users, Bitcoin has made a significant impact on users and is likely to become even more widely popular in the future.