The Lightning Network, L2 protocol which enables small and instant bitcoin payments, is getting bigger and more useful.
The Lightning Network (LN) is a “layer 2” payment protocol layered on top of Bitcoin. It is intended to enable fast transactions among participating nodes and has been proposed as a solution to the bitcoin scalability problem. Bitcoin can only handle approximately seven on-chain transactions per second, as opposed to some mainstream credit cards that frequently handle north of 1,000 TPS. Bitcoin transactions on the Lightning Network often cost less than on-chain transactions. Thanks to the Lightning Network, Bitcoin has added versatility amid increasing use. The Lightning Network white paper was first released in 2015, but its most recently updated version was released in 2016 and remains in draft form. It features a peer-to-peer system for making micropayments of cryptocurrency through a network of bidirectional payment channels without delegating custody of funds.
The Bitcoin Lightning Network capacity attained an ATH of 3915.776 BTC, as data from Bitcoin Visuals show, displaying a commitment to the cause of improving BTC transaction speeds and reducing fees over the layer-2 protocol. All other aspects of the Bitcoin Lightning Network continue to grow as well.
The Bitcoin LN was first implemented into the Bitcoin mainnet in 2018 and ever since then has been able to maintain an upward trajectory in terms of expanding its capacity. It saw a temporary disruption on April 18, when the LN capacity dropped by 7.7% . The drop was accompanied by a quick recovery by May 2. According to a newly published report, The State of Lightning Volume 2, the number of payments on the Lightning Network has roughly doubled, compared to a year ago, while the value of the payments has increased by more than 400%, measured in U.S. dollars. BitPay, likely one of the most used payment processors for non-trading-related bitcoin payments, reported it processed close to 40,000 bitcoin transactions in February. Data from the report show more than 700,000 non-trading-related payments on the Lightning Network in the same month. So, in terms of numbers of transactions, it’s not too far-fetched to think that the Lightning Network is close to rivalling or surpassing the Bitcoin Network in non-trading related payments.
L2 scaling solution takes advantage of the security of an L1 chain and alleviates traffic on it by “rolling up” a number of transactions into a single package to be settled at once. L2 adoption is happening now, even if it is slow. L2’s are improving reliability, decreasing fees, and increasing accessibility. They are still building and improving, and that’s just great!
