Arcane Research has reported that the Bitcoin Lightning Network has short-circuited over the last three months to a 3,400-BTC capacity after surging throughout 2021
It has been reported that the Lightning Network surged from 1,000 to 3,000 BTC in just eight months in 2021, striking the 3,000 BTC mark in mid-October. While the network continues to strike all-time highs, growth grinds down. The total BTC locked in the network is peaking just shy of the 3,500-BTC mark, sparking debate and discussion on social media.
However, as a quick refresher, the Lightning Network is one answer to the scalability issue that has plagued the Bitcoin protocol. Lightning allows instant and super low-cost off-chain transactions; it requires Bitcoin to be locked up in payment channels distributed across Lightning nodes.
The report said that Lightning Network activity soared in 2021, primarily thanks to El Salvador onboarding a whole country and Twitter integrating Bitcoin Lightning tipping. In an October report, Arcane Research predicted that there would be 700 million Lightning Network users by 2030.
Likewise, the Bitcoin LightningNetwork+ Twitter account stated that platforms such as Umbrel (an easy-to-set-up node and Lightning node service) sent initial growth to the moon. Naturally, due to S curve growth, it would have to plateau.
Danny Scott, the CEO and co-founder at CoinCorner, the United Kingdom’s leading Lightning exchange, said:
“I don’t think we’re seeing growth of the Lightning Network plateauing at all. We saw a major growth spike due to last year’s news, and growth would now appear to be more organic.”
S-curve adoption plateaus to one side, he noted that “December is a holiday period for many around the world and often when the Bitcoin industry slows down.”
René Pickhardt, the co-author of the Mastering the Lightning Network book, explained that the slowdown in growth could actually be a good thing for Bitcoin.
He added:
“Given the fact that node count can only grow with channels and that the channel growth is limited by storage constraints in Bitcoin, we might only have a very short period of time with exponential growth. After that, we will be at best linear.”
Moreover, lightning may strike twice for the layer-2 Bitcoin solution. A wealth of updates and news may spark further growth, such as the American mobile payment service Cash App, which rolled out Lightning Network integration to its 30 million users. Indeed, a better UX and easy lightning integration for existing apps and exchanges might be the shock that the network needs.
Scott said:
“Once we introduced ‘Lightning Addresses’ (eg. Danny@CoinCorner.io) to make it easier for our customers to receive Lightning payments we have seen an incredible uptick in usage.”
Thus, the Arcane Research paper agrees with CoinCorner that the Lightning Network could be entering a new growth phase, the best could be yet to come.
Source: Cointelegraph
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