- The layer 2 payment service achieved a total of over 3,400 BTC locked, the Bitcoin community rejoiced. That’s almost $141 million in today’s money. Lightning’s acceptance has exploded in the last year
- When compared to Bitcoin’s market cap of $790 billion, Lightning’s overall capacity is still insignificant. In fact, consumers possess more Bitcoin as Wrapped tokens on the Ethereum blockchain, with Wrapped BTC having a market cap of $10 billion
- It was launched in 2018 with the goal of resolving Bitcoin’s scalability issue. It accomplishes this by allowing users to store a certain amount of Bitcoin on the network. They then use the equivalent to perform a slew of smaller, off-chain transactions. The network sends out payments in one on-chain transaction once transactions are concluded. As a result, there are much cheaper fees and less traffic
Bitcoin’s Lightning Network Has Reached A New Milestone In Terms Of Public Network Capacity, Which Is Now At An All-Time High
When the layer 2 payment service achieved a total of over 3,400 BTC locked, the Bitcoin community rejoiced. That’s almost $141 million in today’s money. Lightning’s acceptance has exploded in the last year, thanks to its near-zero fee BTC payments. As the crypto bull run progressed, bitcoin became much more popular as a network and an investment asset among investors and huge corporations.
Since the crypto meltdown in November, however, growth has slowed. Furthermore, when compared to Bitcoin’s market cap of $790 billion, Lightning’s overall capacity is still insignificant.
In fact, consumers possess more Bitcoin as Wrapped tokens on the Ethereum blockchain, with Wrapped BTC having a market cap of $10 billion.
What Is the Process?
The Lightning Network is an off-chain network that enables users to send Bitcoin payments for almost no cost. It was launched in 2018 with the goal of resolving Bitcoin’s scalability issue.
It accomplishes this by allowing users to store a certain amount of Bitcoin on the network. They then use the equivalent to perform a slew of smaller, off-chain transactions.
The network sends out payments in one on-chain transaction once transactions are concluded. As a result, there are much cheaper fees and less traffic.
A Few Reservations
The network, on the other hand, has some flaws. To begin with, the price of Bitcoin transactions is not fully eliminated. It still charges consumers for creating a Lightning channel, which must be done on-chain. Most importantly, it exposes consumers to Bitcoin’s price risks. The network specifically requires users to encrypt their coins. One of the causes for the network’s delayed growth could be volatile BTC price changes.
Lightning and Block
Cash App incorporated the Lightning Network in January, allowing for zero-fee Bitcoin payments. The Lightning Development Kit, which is open-source, enabled this integration.
Cash App’s parent business is Block (previously Square). Block’s CEO, Jack Dorsey, reaffirmed his commitment to open-source technologies and open protocols such as Bitcoin on Tuesday.