Bitcoin Lightning Capacity Rises 68% in 1 Month, Progress in Scaling and Micropayments

The capacity of the Lightning Network, a micropayment channel that is compatible with Segregated Witness and a layer two scaling solution deployed on top of the Bitcoin protocol, has increased by 68 percent in the past 30 days.

Irek Zielinski, a software developer, and Bitcoin researcher, revealed the total sum of micropayment channels on the Lightning Network has risen from 23 BTC to 38.6 BTC, increasing by around 2.2 percent on average per day.

In December 2017, when the price of Bitcoin peaked at $20,000 after achieving a new all-time high and the valuation of the cryptocurrency market reached $850 billion, the transaction fee of Bitcoin surpassed $10 on average and reached $30 on large transactions.

Eight months ago, the Bitcoin network was processing 500,000 transactions on a daily basis but recently, the Bitcoin network has been settling less than 150,000 transactions per day.

As the price of Bitcoin goes up in the upcoming months as experts like BitMEX CEO Arthur Hayes predict, the transaction fee of Bitcoin will rise simultaneously.

This is especially the case if the demand for Bitcoin rises during a strong rally, as it will be costly to process transactions on the main chain of Bitcoin once again.

Second layer scaling solutions like the Lightning Network are capable of processing small transactions efficiently, without imposing immense pressure on the main chain or the main Bitcoin network.

The growth of the Lightning Network from 23 BTC to 38.6 BTC may seem like a minor improvement in its capacity, considering that in the past month, only $120,000 worth of Bitcoin was added to Lightning payment channels.

"But while the capacity and the number of nodes as well as channels are increasing steadily, the reliability of successfully routing a payment on the Lightning Network is still quite low, especially for larger amounts. The success rate for a payment for no more than a few dollars between random LN nodes is 70%". Moreover, Jeff Garzik, former Bitcoin Core developer and the co-founder of Bloq, a blockchain software company, also noted that a random individual became the biggest node operator on the Lightning Network by opening several channels worth $50,000.

With steady growth, these issues can be resolved by the open-source community of Bitcoin developers and as long as platforms like Bitrefill continue to demonstrate the potential of Lightning on commercial applications and platforms, the capacity of Lightning will likely continue to increase rapidly.