A recent report published by River, a Bitcoin technology and financial services company, has revealed that the Lightning Network, a scaling layer for Bitcoin, has grown by 1,212% in two years. River's estimation comes from examining operators of nodes comprising 52% of the public capacity on the network, concluding that it has "become much more global, with more equally distributed activity."
River States Lightning Network Transactions Grew by 1,212% in Two Years
A report published by River, a Bitcoin services company, has released estimations indicating a significant growth in the use of Lightning Network, a Bitcoin scaling layer. The report, which used data provided by node operators that facilitate 52% of the public capacity of the network, estimates that 6.6 million transactions constitute a "lower bound" of the routed transactions of the whole network in August 2023.
River states that an upper bound for these transactions could be a multiple of this number "if there was data availability of direct and private transactions between participants." This represents an increase of 1,212% compared to the 503,000 payments estimated for August 2021 by K33 (formerly Arcane Research), despite the significant reduction in price and interest in Bitcoin.
This means that on an average day, Lightning Network would be processing close to 50% of the transactions processed onchain, even with some exchanges still lagging in Lightning Network integration, the ongoing bear market, and the medium of exchange use case of Bitcoin still being small.
Nonetheless, the report indicates that an upper bound for this metric cannot be determined accurately, as direct transactions between only two participants and private transactions cannot be estimated.
Value Transacted Also Grew
The value of funds transacted also grew, with the report estimating that around $78.2 million were moved during August using the Lightning Network. This represents an increase of 546% compared to the $12.1 million estimated in K33's previously referenced report for August 2021.
The size of the average Lightning Network transaction was $11.84 for August, reaffirming the use case of the network to facilitate payments that would be otherwise unfeasible on-chain. On this, the report declared:
Nearly all Lightning payments are unaffordable on the Bitcoin blockchain. Lightning is effectively extending Bitcoin's utility by enabling low-value payments over the Internet.
According to River's findings, most of the Lightning Network's growth comes from use cases linked to gaming, social media tipping, and streaming, accounting for 27% of the growth reported.
What do you think about River's Lightning Network report and its growth estimations? Tell us in the comments section below.
Source: Bitcoin.com
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