GROWTH IN BITCOIN LIGHTNING NETWORK – You are forgiven if you have forgotten about the Lightning Network (LN). This layer-two scaling solution aims to help Bitcoin (BTC) maintain its increasing workloads and has seemingly taken a backseat since the rise of bitcoin as a means to store value and alternative digital assets.
Given its status on the outskirts, you may also be forgiven for imagining that the Lightning Network remains in a largely incomplete or undeveloped condition. However, professionals and industry figures related to Cryptonews.com that the project has been enjoying increased usage in recent months and that its technology is ready for wider deployment.
Their continued narrative is still framing bitcoin as a store of value, with some technical solutions that still need to be hashed out, it may be into the future before Lightning helps digital assets become a widely used means of exchange.
Growth in nodes, and soon growth in usage
All BTC holders may not use it, however, the Lightning Network’s node count recently hit an all-time high. It now sits at just under 9,000 nodes, which is nearly the same number as total Bitcoin Core nodes.
Having grown by 81% since January 1, 2020, this number is very impressive. That being said, the overall number of BTC locked into the LN is currently 1,080, which is the same number that was locked into the network back on April 7, 2019.
This accounts for only 0.025% of the 4.25m bitcoins estimated(by Glassnode) to be in the digital assets’ regular circulation. Nevertheless, even though most onlookers acknowledge that the LN is still a work-in-progress, they additionally argue that it’s ready to perform and to be used more widely.
“It has already reached a point where it is possible to integrate with wallets like OKEx to offer users greatly reduced transaction fees and times on smaller amounts of BTC. This is an incredible step forward as one of Lightning’s biggest issues has been the accessibility of this technology to the average person – and the user experience,” said OKEx CEO Jay Hao.
OKEx has since integrated the Lightning Network into its exchange, and it’s not the only exchange to have also done so in recent weeks. OKEx-affiliated exchange OKCoin did so in January, as well as Vietnam’s oldest exchange VBTC and also the UK’s exchange CoinCorner. It is also now supported by Bitfinex, while Kraken aims to bring aboard the coin later this year.
It’s not just about exchanges.
As reported, Strike, a famous BTC banking service by US-based Bitcoin Lightning startup Zap, plans to have its Strike Cards ready to go for countries on two continents in the first half of 2021. Strike is a platform that allows users to perform Lightning payments with their choice of a bank account or debit card, without the need for anything else. Back in early July, Strike’s public beta test was announced, and the product got “well into 5-figure registered users and currently process millions of dollars in volume per month.”
Even Bitcoin developer Chris Belcher who also told Cryptonews.com, that the Lightning Network is “ready for greater deployment,” and this most recent wave of new integrations suggests that this is such the case.
This network has had a history of being difficult to use, OKEx is hopeful that its integration will go over smoothly making some way for it more accessible for the average person.
“On OKEx, it will be very simple and efficient to take advantage of the Lightning Network and this will help encourage greater usage and support the development of the wider Bitcoin ecosystem,” according to Jay Hao.
What challenges remain?
“In software, there is always more to do, and then there’s more clients, more users, more vendors. Software systems can only really mature as part of widespread adoption, where rough corners get polished and more developers to build their things on top,” said Rusty Russell, an engineer who works on Blockstream’s Lightning team.
This holds of the LN, which made multiple headlines in 2020 for all the wrong reasons. Two research papers detailed technical glitches which made it nearly possible to steal funds on Lightning, even though so far there has been no major, publicly well-documented attack on the network.
Lightning’s known vulnerabilities are genuinely concerning, yet people using the network believe that these bugs will be resolved.
“The Lightning Network is still incredibly young and has to overcome technical challenges such as its nodes being vulnerable to attack, centralization issues, usability, etc. That said, when you consider how quickly it has developed, the achievements that it has already made are exceptional,” said Jay Hao.
Similarly, Rusty Russell reported to Cryptonews.com that he is “happy with the continuous improvement we’re seeing, and all the incremental improvements we have planned.” While developers believe the Lightning technology to be sound, it still isn’t as popular as most would like. For Russell, this is primarily a result of the recent bull crypto market.
“The current bitcoin narrative has very much been ‘store of value’, whereas Lightning is mainly about moving small amounts of Bitcoin. That means Lightning just isn’t on bitcoin’s main hype rails!” he said.
On the other hand, Chris Belcher does not fully believe that the Lightning Network is hurting from underwhelming usage.
“Many people think LN isn’t very adopted, but I think that’s coming from ‘the fallacy of the measurable.’ LN transactions are off-chain and are very hard to count, so that leads people to just ignore them. But in fact by some estimates today LN does millions of transactions per month,” he said.
‘A genuine Internet micropayment system’
Looking into the future, it may take some time before the LN is used more widely, possibly because it represents genuinely new technology.
“Lightning isn’t simply ‘VISA on Bitcoin’; it’s not a credit network at all. It’s a genuine Internet micropayment system, and if that’s what your idea needs, it wasn’t possible at all before Lightning,” said Rusty Russell.
Even within its stages of maturation, the Lightning Network is getting ready for a time where many people will want to use bitcoin as the primary currency, and thus helping to bring about such a time a reality.
Jay Hao said, “I think that when we reach a stage in which BTC starts to be more widely used as a currency rather than a store of value the case for solutions like the Lightning Network becomes even more compelling.”