Bitcoin Lightning Network Growth Capacity Plateaus At 3,400 BTC

Bitcoin (BTC) Lightning Network, following an exponential climb in capacity over 2022, had a sluggish start to the new year.

According to Arcane Research, growth in Lightning Network capacity, or the number of BTC locked up in channels, has slowed.

Bitcoin Lightning Network in 2021, increased from 1,000 to 3,000 BTC in just 8 months, reaching the 3,000 BTC mark in mid-October.

While the network continues to reach new highs, growth is slowing.

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What You Need To Know

The total amount of BTC locked in the network is approaching 3,500 BTC, sparking debate and discussion on social media.

Bitcoin Lightning Network is one solution to the scalability problem that plagued the BTC protocol.

Lightning enables instant and extremely low-cost off-chain transactions; however, it necessitates Bitcoin being locked up in payment channels distributed across lightning nodes.

In 2021, Lightning Network activity skyrocketed, owing primarily to El Salvador onboarding an entire country and Twitter integrating Bitcoin Lightning tipping.

Arcane Research predicted 700 million Lightning Network users by 2030 in an October report.

So, what is causing the slowdown in growth in 2022?

Bitcoin Lightning Network (Bitcoin LN+) According to the Twitter account, platforms such as Umbrel (a simple node and lightning node service)

Sent initial growth to the moon. As a result of the S curve’s growth, it would have to plateau.

According to Danny Scott, CEO and Co-Founder of CoinCorner, the UK’s leading lightning exchange:

“I don’t believe the Lightning Network’s growth is coming to a halt.” We saw a significant increase in growth as a result of last year’s news, and growth now appears to be more organic.”

He notes that “December is a holiday period for many around the world and often when the Bitcoin industry slows down,” as S-curve adoption plateaus to one side.

Rene Pickhardt, co-author of the book “Mastering the Lightning Network,” explained that the slowdown in growth could be beneficial to Bitcoin. He wrote on Twitter:

“Given the fact that node count can only grow with channels and that the channel growth is limited by storage constraints in Bitcoin, we might only have a very short period of time with exponential growth. After that, we will be at best linear.”

In the future, lightning could strike twice for the second layer Bitcoin solution.

A plethora of updates and news, such as the American mobile payment service Cash App.

Which rolled out Lightning Network integration to its approximately 30 million users, may spur further growth.

Indeed, improved UX and simple lightning integration for existing apps and exchanges may be just what the network needs. Danny clarifies the situation:

“Once we introduced “Lightning Addresses” (eg. Danny@CoinCorner.io) to make it easier for our customers to receive Lightning payments we have seen an incredible uptick in usage.”

The Arcane Research paper concurs with CoinCorner that the Lightning Network may be entering a new growth phase, with the best yet to come.