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The Bitcoin Lightning Network Continues to Grow


The current capacity of the Lightning Network public channel is 3,539 bitcoins and continues to grow at over 30% annualized.

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“Bitcoin itself cannot scale so that every financial transaction in the world is broadcast to everyone and included on the blockchain. There must be a secondary level of payment systems that is leaner and more efficient. – Hal Finney

In today’s Daily Dive, we take a look at the growth of the Bitcoin Lightning Network. The Lightning Network is a second-layer decentralized scaling solution built on top of the Bitcoin network that enables cheap payments between counterparties. The Lightning Network can essentially be thought of as a bar tab between counterparties, with the opening and closing of the tab serving as the equivalent of an on-chain bitcoin transaction. The proverbial “bar tab” is built using a 2-in-2 multisig wallet, which allows users to take control of their funds in the event of a hostile counterparty.

Although today’s Daily Dive doesn’t go much deeper into the technical mechanics of the Lightning Network, you can find additional information here.

Although the Lighting Network allows private channels between counterparties, the total balance locked in these channels is not public, which is self-explanatory. Thus, in our analysis, we will focus on the capacity of public channels, but it is important to remember that this is without counting the potentially important channels set up between private counterparties.

At the time of writing, the current capacity of the public chain is 3,539 BTC. The pane below shows the 30-day growth rate, which displays the relentless growth of the Lightning Network over the previous three years.

Growth was the highest in 2021 in the past two years, with 30-day growth reaching a peak annualized growth rate of nearly 348% in August last year. Since then, public channel capacity growth has slowed but continues to grow at over 30% annualized averaging growth over the past 30 days.

The capacity of the Bitcoin Lightning network continues to grow
The Bitcoin Lightning Network Continues to Grow

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