There was a time when scaling Bitcoin was the next evolutionary step. In 2018, it fostered the creation of the Bitcoin Lightning Network. However, the buzz and functionality of the L2 payments system have faded over time. Whether it’s the store-of-value story or Bitcoin being dubbed “digital gold,” few speculators seem concerned about its suitability as a method of trade.
Between February 2020 and 2021, its increase was equally modest, with total capacity increasing from 886 BTC to 1095 BTC (23 percent ). However, there have been a few modifications that may necessitate a re-examination of the situation of lightning.
Bitcoin Lightning retaliates
Bitcoins locked on the Lightning Network have more than doubled in value from the beginning of March 2021, nearly doubling from 1095 to 2087.87 BTC at press time. The total number of nodes has also doubled, reaching 23,880. At the time of writing, there were a substantial number of channels on 1ml.com, totaling 60,978.
If Lightning continues to develop at its current rate, the L2 scaling solution will have surpassed a capacity of 10,000 BTC by March 2022.
The lightning channel is being used to send tiny Bitcoin transactions. Furthermore, throughout its revival, the number of Bitcoin addresses holding between 0.01-1 BTC has increased.
On May 11, there were 8.17M addresses holding 0.01-1 BTC. However, on July 28, there were 8.25M addresses owning 0.01-1 BTC.
Is this phase of expansion legitimate?
If we look back on Lightning’s history, we can see that it was created to promote cheaper and faster transactions. However, other networks have done it better over time, and Lightning has remained a victim of delayed development. Many people are dissatisfied with its rate of expansion, which was very visible between February 2020 and February 2021.
However, after El Salvador’s government announced Bitcoin as legal cash, the story may have shifted slightly. With a government declaring it legal to enable Bitcoin transactions, the Lightning Network is currently seeing increased exposure and demand.
This story will only get more interesting if additional governments or organizations start accepting Bitcoin payments. Bitcoin lightning may not be finished just yet, but it has come back from the dead.