The Lightning Network, the layer-2 payments system for Bitcoin (BTC), is still thriving in spite of macroeconomic headwinds and sluggish price action.
The 5,000 BTC ($96 million) milestone capacity for the Bitcoin Lightning Network has already been reached. In practice, as long as Bitcoiners continue to support the network’s development, more and more Bitcoin is being introduced to Lightning Network payment channels worldwide.
The amount of available liquidity grows as network capacity increases. Users may thus enjoy quick payment processing times and possibly higher transaction volumes.
The Lighting Network, which was initially introduced in 2018, has recently faced criticism. Influential Bitcoin users like Udi Wertheimer have spoken about the network’s “collapse,” claiming that no one utilizes it.
However, the network’s 4,000 BTC capacity was reached in June, and over the preceding four years, it has developed into a reliable payment network that is widely used in Gibraltar, the Isle of Man, and El Salvador.
The relevance of the LN is explained by Nourou of Bitcoin Senegal. According to him, Senegalese of the working and proletariat class, who represent the majority of the population, acquire milk, sugar, coffee, water, and many other essential items for their breakfast for 50 FCFA (0.07€), which is equal to one euro cent.
“Microtransactions are our economic reality. For Bitcoin to become the standard in the years to come, and in our economies, the lightning network would have to have enough capacity to support these microtransactions.”
One of the first people to commemorate the achievement of 5,000 Bitcoins was Nicolas Burtey, CEO of Galoy. According to Burtey, the Lightning Network achieved its tipping point when it was accepted in El Salvador. He said, “The bill should have been dubbed the Lightning Law! This is where all statistics really began to take off!
While the 5,000 BTC number is significant, Burtey noted, “Payment velocity per channel is growing at an even higher rate. Despite being a more useful indicator, only node operators can see it, so it isn’t as often reported in the press.
The Lightning Network, that was previously a gathering place for Bitcoin enthusiasts, is now popular with big businesses.
Engineers for the Bitcoin Lightning Software are now being recruited by MicroStrategy. With 130,000 BTC on its balance sheet, MicroStrategy has the largest holding of Bitcoin among publicly traded corporations.
In a different development, Jack Mallers’ Strike, a Bitcoin Lightning startup, raised $80 million to “revolutionize payments” for businesses. Plans to use Bitcoin in El Salvador in 2021 were prompted by Mallers and Strike.