Lightning Network Hits Record Capacity As Adoption Grows
The Lightning Network's bitcoin capacity has never been higher than it is today.
Over 1,512 bitcoin are now locked up in Lightning channels; 60% more than a year ago. In U.S. dollar terms, that's just shy of $60 million, which, while lower than the record dollar capacity of $76 million earlier this year, presents an increase of almost 580% since last year, in part due to Bitcoin's considerable price surge over the last 12 months.
Similarly, other Lightning stats are at all-time highs: the public node count currently stands at more than 12,000 nodes, more than twice as much as in June last year, while the unique public channel count has crossed the 45,000 mark, up from 29,000 last year. These numbers, reported by Bitcoin Visuals, don't take into account private channels, which some argue make up a sizeable part of the network.
The growth of Bitcoin's popular layer-two solution comes as advocating voices are getting louder around the world, pushing for further adoption of the network. Built on top of Bitcoin, the Lightning Network is a scaling solution that allows users to send and receive funds near-instantly and at minimal cost, by taking transactions off-chain. Launched into its beta phase in March of 2018, Lightning is often regarded as Bitcoin’s most promising approach to scaling transactions for daily use.
The Lightning Network ecosystem has seen a wide range of developments since its launch, from auditing tools and channel capacity boosts over liquidity marketplaces and trading solutions to the adoption by online merchants and (although a little sluggishly) exchanges. Yet arguably its largest boost to global recognition still lies before network, as it faces the concept of large-scale real world use by no other than El Salvador, the first nation state to declare Bitcoin legal tender.
Strike, a payments app that utilizes the Lightning Network to facilitate fast day-to-day transactions, launched in the country in March this year and quickly became the most downloaded app. Bitcoin Beach, a nonprofit in El Salvador's El Zonte, pioneered the local efforts to adopt Lightning and test its capabilities on a small scale, inspiring the country's president Nayib Bukele to move forward with the nationwide roll-out.
After rapidly signing Bitcoin into law earlier this month, Bukele is currently working with payment app developer Strike to ease the access to Bitcoin payments across the Middle American country. The use of Bitcoin overall has increased rapidly in El Salvador over the last year, with small bitcoin transfers of $1,000 or less jumping from $424,000 to $1.7 million between May 2020 an 2021, according to a Reuters report.
Yet full nationwide adoption has yet to come, as El Salvador seeks to establish the necessary infrastructure to support the move, which, according to Bukele, includes improved access to mobile and internet connectivity for its citizens.
The Lightning Network meanwhile has been seeing steady growth and development, a trend that continues with the recent lock-in of Taproot, an upcoming upgrade to the Bitcoin network that is expected to not only benefit the Bitcoin main chain, but also improve the privacy of Lightning channel openings and closures as well as the practicality of the network overall in the process.