Cryptocurrency

4 Reasons The Bitcoin Lightning Network Will Continue To Grow

Bitcoin (BTC) layer 2 payment protocol Lightning Network has increased its capacity exponentially over the past years. Since its launch in 2018, the network’s capacity has grown from 1000 BTC to 1800 BTC.

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Lightning Network was first proposed in 2015 and works with payment channels to enable users to send and receive faster and cheaper processes than Bitcoin’s base layer. These processes are processed “off-chain” by lightning nodes. 2021 has been a valuable year for the growth of the Bitcoin Lightning Network. As Arcane Research points out, more than 800 BTC has been added to capacity since January this year alone.

It took 39 days for Lightning Network to go from 1100 to 1200 BTC and 5 days from 1700 to 1800. These data show that there is high demand.

Ryan Gentry of Lightning Labs Business Development believes that recent growth has come from 4 main sources. First, three companies, Umbrel, RaspiBlitz, and Voltage, have joined forces to produce Lightning Network-related educational equipment. Created by developers Leo Weese and Hannah Rosenberg, these guides made it easy to get node online (Lightning Network). The Creators Guide touches on valuable bets on Network Topology, channel lifecycle, payment lifecycle, invoices, Frequently Asked Questions (FAQ) and much more.

Thus, people have access to the basic tools to set up their own nodes, contributing to the expansion of the communities built around this Bitcoin-based payment solution.

Lightning Network Expands Bitcoin Peer-to-Peer Potential

In addition, the Lightning Network’s growth in volume attracted a “large influx of capital”. According to the information shared by Gentry last month, the most recognizable nodes received over 4 million dollars. Furthermore, Gentry believes that the Bitcoin law approved by El Salvador proves that the Lightning Network can be used to “cross the abyss.”

In other words, referrals to bring BTC adoption to the mainstream and close the gap between early adopters and the primary majority of users could be a perfect use case to achieve this goal.

Finally, Gentry argues that more companies are realizing that the Bitcoin Lightning Network can make it easier to monetize liquidity, storage, bandwidth, and computation. These resources will be available in a future market.

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