BTC added the layer-2 protocol to mitigate the scaling challenges, Bitcoin Lightning Network (BLN). The BLN was created to offer better scalability, make transactions cheaper, and increase the transaction speed on Bitcoin Network.
Scalability has been a deterrent factor to the mass adoption of many cryptocurrencies. For example, High transaction fees and slow speed are some of the challenges encountered on the Bitcoin Network.
After the introduction of BLN, the scaling issues remained unsolved due to low capacity, among other shortcomings. In addition, the lightning network introduced more problems, such as malicious attacks and low routing fees.
In addition to the attacks, the BLN is incompatible with all wallets. Therefore, one must acquire a compatible wallet to work with it.
With other issues, the BLN capacity has struggled and encountered many criticisms since its introduction in 2018. However, with ongoing expansion and modification, the BLN capacity hit 4,000 BTC in less than four months.
Bitcoin Lightning Network In Its Bull Market
Recent data shows the Bitcoin Lightning Network’s public capacity has increased to 5,000 BTC. Increasing the BLN capacity would allow faster transactions, more liquidity, and a larger transaction volume.
Despite the 2022 crypto winter, which caused so much loss in the crypto market, network upgrades such as scaling solutions continue to improve. The growth in scaling solutions reflects its increasing demand and utility.
Messari, a crypto market intelligence platform, recently commented on the challenges of the lightning network. The intelligence platform stated that Light Network received much patronage and prospered last year because it got protected from the overall market decline. Messari also said that Lightning Networks had stable growth despite the 57% fall in BTC price in the past years.
The report reveals that Lightning Channels and Node counts increased by 24% and 14% YoY, indicating a move to a mature financial payment Network.
Contributors To The 5,000 BTC Push
Another data from Arcane Research said the channel capacity expansion of River Financial and Loop by Lightning Labs contributed to the 5,000 BTC push. In addition, El Salvador’s BTC adoption as ledger tender, including companies like McDonald’s and Starbuck integration of Lightning payments, was a key milestone for BLN.
Lightning Labs announced the alpha version of the Taro daemon to enable BTC developers to design, receive and send assets on the Bitcoin blockchain. The first release was to Bitcoinize the dollar, according to Lightning Labs.
Lightning Labs also announced a $70 million fundraising in Series B funding earlier in 2022. Valor Equity Partners led the fundraiser with Baillie Gifford, a global asset manager. The fund pool was to boost the network that transacts trillions of dollars annually and make it a competitor for Visa and Mastercard.
Furthermore, MicroStrategy listed a job in September that it seeks a full-time Lightning Network software engineer. The reason for seeking an LN software engineer is to build an LN-based software-as-a-service (SaaS) platform. Several firms, including CashApp, Kraken, BitPay, and Robinhood, adopted Lightning Network in 2022.
Featured image from Pixabay and chart from TradingView.com