Research reports have shown that Bitcoin’s layer 2 scaling solution, the Lightning Network – a layer separate from the main chain but interacting with the Bitcoin network, has experienced a significant growth of 1,212% in the space of two years.
Bitcoin Lightning Network Achieves New Height
According to the report from Bitcoin’s financial services River Financial, the Lightening Network’s 1,212% growth accounted for Routed transactions. Routed transactions basically involve more than two nodes, hence, the figure above could be significantly higher. The network’s routed transactions have impressively increased from 503,115 in August 2021, to 6,599,553 by August 2023.
In the report, Sam Wouters, River research analyst said the numbers “came as a shock” due to the decline in Bitcoin (BTC) price and substantial loss of interest in online searches.
This is because the report revealed that Bitcoin’s price has dropped by 44%, while online searches for the top cryptocurrency have dropped by 45% since that time, yet the Lightning Network continues to grow.
Wouters said he was so surprised with the numbers that he had to run the numbers “many times” while validating the calculations with external parties. The research analyst therefore highlighted that the Lightning Network has achieved a lot despite the ongoing bear market and having just 5,000 BTC locked in the network.
Source: River Financial
Wouters took to his official X (formerly Twitter) handle on Tuesday, October 10, 2023, to share the recent report on the Lightning Network highlighting the growth of the network.
However, Fiatzaf, the creator of the decentralized social media network Nostr was not so shocked about the network’s growth as Wouters. The creator stated that he believes that the numbers reflect a “natural growth”, due to the tiny nature of the network.
So far, the Lightning Network has also seen a significant increase in transaction volume in the past 2 years. As of August 2021, the network’s transaction volume was estimated at $12.1 million and 303 BTC. However, by August 2023, the network’s transaction volume rose to an estimated $78.8 million and 2,950 BTC, indicating a 546% and 874% increase respectively.
In addition, the average Lightning transaction size was about 44,700 Satoshis or $11 in August 2023. However, in September 2023, the average Lightning transaction size was estimated at 279,000 Satoshis, with 1.1 million lightning active users.
The report also highlighted the network’s Lightning payments success rate in August 2023, which was around 99.7% on its platform across 308,000 transactions. The Lightning Network is now processing no less than 47% of Bitcoin’s on-chain transactions.
Gaming And Other Sectors Attributed To Growth
According to the report, other sectors such as gaming, social media tipping, and streaming sectors contributed to the significant growth in the Lightning Network.
However, the one sector that Wouters said he didn’t see coming was the gaming sector which had a huge impact on the growth rate of the network with hundreds of thousands of active users tuning in to the gaming sector every month.
In the report, it was seen that 25% of all network activity between 1-10 sessions (or $0.0002), went to the gaming and streaming sectors. While another 25% in 10-1,000 sessions went to tipping, and anything beyond 10,000 appears to be for node balancing, remittances, and trade.
BTC price struggles to maintain $27,000 support | Source: BTCUSD on Tradingview.com
Featured image from Shutterstock, chart from Tradingview.com
