Lightning Network: 2018 to 2023 and Beyond
Introduction
Lightning Network, the layer-two scaling solution for Bitcoin, has come a long way since its inception in 2015. Designed to facilitate fast and cheap Bitcoin transactions, the Lightning Network has gained significant adoption over the past few years. With the increasing demand for Bitcoin and the growing congestion on the Bitcoin blockchain, Lightning Network has emerged as a promising solution to address the scalability issues of Bitcoin.
As we enter 2023, Lightning Network continues to make strides in adoption and development. Many businesses and individuals are now using Lightning Network to process their Bitcoin transactions, and the number of Lightning Network nodes and channels has been steadily increasing. Despite some challenges and criticisms, Lightning Network has proven to be a viable solution for Bitcoin scaling, with improvements in its security, usability, and interoperability.
In this article, we will explore the current state of Bitcoin Lightning Network, its adoption, and where it stands today in 2023. We will also discuss the future of Lightning Network and its potential impact on the broader crypto ecosystem.
Summary Of Past Development
Over the past few years, the Bitcoin Lightning Network has experienced significant growth and widespread adoption, particularly in emerging markets. Thanks to its increasing integrations and availability in these regions, the Lightning Network has been able to substantially expand its capacity, positioning it as a promising solution for scaling Bitcoin transactions.
At present, the Lightning Network boasts an impressive capacity, with over 5,400 bitcoin locked in its network. Bitcoin capacity within the Lightning Network refers to the total amount of bitcoin that can be transacted at any given time through this network. This total capacity, however, is not fixed, and is constantly evolving as more nodes join the network and open new payment channels with each other.
A thorough analysis of the Lightning Network’s expansion and its current capacity can shed further light on its impressive progress to date.
April 2018: The First Real World Lightning Transaction
LN Capacity: almost nothing
On December 28, 2017, Bosworth announced on Twitter that he had successfully completed the first Lightning Network transaction on the Bitcoin mainnet for an online purchase at Bitrefill. He shared a screenshot of the transaction, which showed that he had paid 0.00127 BTC to refill of his Swedish mobile phone plan.
Bitrefill is a platform that allows users to purchase mobile phone credit and gift cards with Bitcoin. The platform integrated the Lightning Network in March 2018, allowing users to make instant and low-cost Bitcoin payments using the Lightning Network.
Bosworth’s transaction was significant because it demonstrated the real-world use case of the Lightning Network for fast and low-cost Bitcoin payments. It also showed that the Lightning Network was capable of handling real-world transactions and had the potential to scale Bitcoin to handle a larger volume of transactions.
August 2018: User Friendly Lightning Wallets
LN Capacity: 1 BTC
Lightning Network-enabled wallets started to become available for mobile devices, making it easier for users to access the Lightning Network. Some of the Lightning Network-enabled wallets that became available for mobile devices included:
- Eclair Wallet — developed by ACINQ, a French Bitcoin technology company, Eclair Wallet is a Lightning Network-enabled wallet available for Android devices.
- Zap Wallet — developed by Jack Mallers, Zap Wallet is a Lightning Network-enabled wallet available for both Android and iOS devices.
- BlueWallet — developed by BlueWallet Services, BlueWallet is a Bitcoin and Lightning Network-enabled wallet available for both Android and iOS devices.
- Wallet of Satoshi — non-custodial Bitcoin Lightning Network wallet that allows users to send and receive Bitcoin payments using the Lightning Network. It was created by creators of Living Room of Satoshi, an Australian company that specializes in providing payment solutions for Bitcoin.
These wallets allowed users to send and receive Bitcoin via the Lightning Network, making transactions faster and cheaper than on the Bitcoin mainnet. Since then, many other Lightning Network-enabled wallets have been developed and made available for mobile devices.
January 2019: Lightning Torch
LN Capacity: 107 BTC
In early 2019, a novel promotional campaign for the Lightning Network was initiated by an anonymous Twitter user going by the handle hodlonaut. This initiative, known as the Bitcoin Lightning Torch, was aimed at demonstrating the capabilities of the Lightning Network by sending micropayments through a chain of trusted individuals.
The Lightning Torch commenced on January 19, 2019, with hodlonaut sending 100,000 satoshis (0.001 bitcoin) to a trusted recipient who added 10,000 satoshis ($0.34 at the time) and forwarded the payment to another trusted recipient. This chain continued with each recipient adding to the payment before sending it on to the next recipient. This game-like initiative achieved significant visibility and the Lightning Torch payment eventually found its way to prominent personalities in the cryptocurrency industry, such as Twitter CEO Jack Dorsey, Litecoin Creator Charlie Lee, Lightning Labs CEO Elizabeth Stark, and Binance CEO “CZ” Changpeng Zhao, among others.
The Lightning Torch initiative effectively demonstrated the potential of the Lightning Network to facilitate micropayments and foster trust between individuals in a decentralized manner. This creative promotional campaign also helped to increase awareness and interest in the Lightning Network, leading to increased adoption of this technology.
March 2019 to December 2020: Steady Growth
LN Capacity: 800 BTC
During the latter half of 2020, the Lightning Network, experienced significant growth and development. This was largely due to the opening of numerous new payment channels by users and merchants, which increased the overall liquidity and capacity of the network. The Lightning Network’s ability to provide fast and cost-effective transactions on the Bitcoin network has led to growing adoption by businesses and users alike.
Major Bitcoin exchanges, including Bitfinex, played a significant role in facilitating this growth by implementing Lightning Network support. This allowed their users to deposit and withdraw funds using Lightning Network channels, contributing to the network’s increased adoption. By December 2020, the number of Lightning Network nodes had reached an all-time high of over 8,000, with over 29,000 open channels.
In addition to the growth in payment channels, the Lightning Network also saw the launch of various new wallet implementations such as Phoenix, Breez, and Muun. These new wallets provided users with a more user-friendly experience with the Lightning Network technology.
Furthermore, the Lightning Network’s adoption by merchants has also seen significant progress during this period. Bitrefill, a leading cryptocurrency gift card retailer, and OpenNode, a payment processor that enables merchants to accept Bitcoin payments online, are notable examples of merchants that have started accepting Bitcoin payments through the Lightning Network. The e-commerce platform Shopify has also partnered with OpenNode to enable Lightning Network payments for its more than 500,000 merchants, further driving adoption of the Lightning Network as a payment option.
2020–2022: El Salvador, Cross Border Payments, Major Retailers
LN Capacity: 5,000 BTC
In September 2021, El Salvador made history by becoming the first country to adopt Bitcoin as legal tender, mandating businesses to accept the cryptocurrency. Within just four months of this landmark decision, the country successfully onboarded 4 million users onto its government-backed Bitcoin wallet. This has set off a series of developments and partnerships, showcasing the growing adoption of Bitcoin and Lightning Network innovations in El Salvador and beyond.
In response to El Salvador’s adoption of Bitcoin, Strike, a leading digital payments platform, launched a Bitcoin Lightning payment app in the country. Leveraging the Lightning Network, which is built on top of Bitcoin’s core protocol and enables near-instant, low-fee transactions, Strike offers a user-friendly experience for settling transactions. All complex cryptography is handled seamlessly in the background, with balances displayed in fiat currency and deposits/withdrawals possible with zero fees by linking a bank account.
The adoption of Bitcoin in El Salvador has already shown promising results, with the El Salvador Central Reserve Bank reporting $52 million in remittances processed through BTC wallets in the first two quarters of 2022.
CoinCorner, a Bitcoin Lightning-based card payment service provider, announced plans in October 2022 to install NFC card readers across El Salvador, aiming to offer a frictionless retail experience for BTC holders. This would enable El Salvador-based Bitcoin users to spend their BTC using the “tap-to-pay” feature wherever NFC card readers are available, utilizing the Lightning Network for seamless retail transactions.
CoinCorner has also partnered with Bitnob to facilitate cross-border transactions from the UK and Europe to Africa over the Lightning Network, allowing for instant fund transfers from GBP or EUR to NGN, KES, or GHS in local bank accounts or mobile money wallets in Nigeria, Kenya, and Ghana.
Integration of Lightning Network in Cash App:
In October 2022, Cash App integrated the Lightning Network, enabling its 47 million users to transact in Bitcoin seamlessly. This streamlined process involves users accessing the “Money Tab” within the app, selecting Bitcoin, and generating a QR code or link for transactions with other Lightning-enabled wallets.
“Send Globally” Feature by Strike:
In December 2022, Strike introduced its “Send Globally” feature, facilitating instantaneous and cost-effective payments from the United States to Africa and the Philippines. Through strategic partnerships with Bitnob in Africa and Pouch in the Philippines, Strike users can now easily send money to countries including Nigeria, Ghana, Kenya, and the Philippines using Lightning rails, all without incurring any transaction fees.
Payments made through this feature are instantly converted into local currencies and directly deposited into the recipient’s bank account, mobile money account, or Bitnob/Pouch account, based on the recipient’s location. This innovative integration of the “Send Globally” feature underscores Strike’s commitment to leveraging cutting-edge technology to provide accessible and efficient cross-border payment solutions, ultimately revolutionizing the landscape of international remittances.
Bitcoin Lightning Payments for Major Merchants:
Strike has also been implementing Bitcoin Lightning payments for major American merchants and payment providers. For instance, Shopify, a multinational eCommerce company, now allows shoppers to buy products using Bitcoin and Lightning invoices. This enables any online merchant using Shopify to accept payments using the Lightning Network instead of traditional rails.
Additionally, Strike has formed a partnership with Blackhawk, a global alternative payment network, to enable Lightning payments for in-person transactions at over 400,000 storefronts and 37,000 partners. Strike has also announced a strategic collaboration with NCR, the world’s largest provider of point-of-sale payments, to facilitate Lightning payments at major American retailers.
Furthermore, Clover, a prominent point-of-sale software provider, has joined forces with Strike to bring Bitcoin’s Lightning Network to millions of merchants. The integration will undergo a 90-day trial period, allowing for faster and more cost-effective payments at participating merchants. Upon successful completion of the pilot, Strike plans to be listed in the Clover app store, and eventually integrate directly into Clover’s system. This would enable Lightning payments to be enabled by default for all Clover merchants, placing it on par with traditional card networks like Visa and MasterCard.
South African grocery retailer Pick n Pay is now accepting Bitcoin via the lightning network in all of its 1,628 stores following a three-month pilot testing phase in 39 locations. As part of its nationwide rollout, store customers will be able to pay for items using cryptocurrency via smartphone apps or by scanning a QR code and accepting the South African rand’s conversion rate at the time of payment.
These recent updates and partnerships demonstrate the evolving landscape of Bitcoin adoption and Lightning Network innovations in El Salvador, as well as the expanding use cases for digital payments in Africa through strategic collaborations between fintech companies.
Lightning Network in 2023
Nostr — The Decentralized Data-Sharing Protocol With Lightning Network Integration
Nostr is an open protocol that aims to revolutionize social networks by creating a censorship-resistant global data-sharing network. Nostr operates without the need for a trusted central server, allowing users to run their own client. With a simple and open design, Nostr enables decentralized social media applications to be built on top of it.
One such application is Damus, a Twitter competitor that is built on the Nostr protocol and is available on iOS and Android platforms. The concept of an open and free social media network has gained strong support in the Bitcoin community, with prominent figures like Jack Dorsey and Adam Back endorsing Nostr.
In addition to their shared ideology, Nostr has the potential to boost adoption of the Lightning Network (LN), as Damus has integrated various LN wallets such as Wallet of Satoshi, Strike, BlueWallet, and others. This integration can help onboard users to LN, as Nostr supports the Bitcoin payment network through Nostr Zap.
So, what are Zaps?
Nostr users have been able to tip each other using the Lightning Network since its inception, but now the protocol and its clients have taken a step further by deploying a new proposal called NIP-57. This proposal introduces a new note type called a “Zap,” which represents paid lightning invoice receipts sent by a lightning node called the zapper. Zap requests capture data from a Lightning invoice, including the payment amount, payee, and payer, and form a new event that can be captured by relays and displayed by clients. The introduction of lightning receipts on Nostr allows clients to display lightning payments from different users on the network. These zaps can be used for tipping, payment for goods and services, unlocking content, and even as a deterrent against spam.
Nostr users have generated over 500k zaps, with an average of 5k to 15k zaps per day. Currently, there are 119 Zap providers as of mid-April 2023.
Since its launch at the beginning of 2023, Nostr has already gathered an impressive user base, with over 2 million total users and more than 160k Nostr profiles linked to Lightning Network addresses, according to the platform’s statistics. Remarkably, Nostr boasts an average of 1 million weekly active users, a clear indication of its rising popularity as a decentralized social media platform. This increasing user base is also expected to drive further growth on the Lightning Network in the future.
Xapo Bank Integrates Lightning Network for Instant Bitcoin Payments
Xapo Gibraltar-licensed private bank has integrated the Lightning Network. Users of Xapo Bank can now instantly pay for small purchases of up to $100 at any vendor accepting Lightning payments, without suffering high transaction fees and long blockchain confirmation waiting times, according to a press release.
The Xapo Bank platform offers an annual interest rate of 4.1% on U.S. dollars in accounts, that are $100,000 deposit-guaranteed, and will soon be offering up to 1% on Bitcoin.
Lightspark — Solution for Liquidity and Reliability on the Lightning Network for Enterprises
Lightspark, founded in 2022, is a startup led by former Paypal president and entrepreneur David Marcus that has recently unveiled a platform for Bitcoin’s Lightning Network aimed at onboarding businesses to the network. The company has raised $175 million in funding.
Lightspark’s goal is to make it easier for enterprises to harness the potential benefits of the Lightning Network, which is currently seen as complex and technical for many businesses familiar with crypto and payment operations. Lightspark’s solution relies on data science to constantly move liquidity to where it’s most needed, making the Lightning network more reliable.
Lightspark’s approach to the Lightning Network is specifically designed to address the challenges of liquidity and reliability that large may institutions face. Currently, the process of using Lightning involves peer-to-peer “channels” connecting to nodes, but often falls short in providing the necessary liquidity for processing transactions in large volumes required by these institutions to scale their operations. Lightspark’s software tools, however, focus on creating larger channels and increasing liquidity, resulting in a practical and user-friendly experience for businesses to use the Lightning network, much like browsing the internet via a browser rather than dealing with complex underlying protocols such as TCCP.
By prioritizing liquidity and scalability, Lightspark’s approach aims to provide a more reliable experience for large institutions, ensuring that they have sufficient liquidity available to facilitate transactions on the Lightning Network without disruptions. This makes it a viable option for their payment operations, empowering them with the ability to transact seamlessly and efficiently on the Lightning Network, and overcoming the challenges of liquidity that can hinder adoption for larger institutions.
Lightspark’s enterprise-grade infrastructure aims to remove the complexity of connecting to Lightning and provide businesses with access to low-cost, instant payments at scale. The company’s solution is positioned as a way to simplify the onboarding process for businesses to leverage the potential benefits of the Lightning Network for their operations.
ZEBEDEE’s Lightning Network Integrated Services for Gamers
ZEBEDEE, the leading fintech company specializing in Bitcoin services for the gaming industry, is powering a new era of seamless Bitcoin integration in gaming communities. With its sophisticated tools, ZEBEDEE enables developers to create Bitcoin-powered games and communities, bridging the gap between real and virtual economies with the world’s largest cryptocurrency.
At the heart of ZEBEDEE’s offerings is their custodial Bitcoin wallet, designed specifically for gamers and streamers. Leveraging the Lightning Network, the wallet allows for instant sending and receiving of Bitcoin, while shielding users from the complexities of cryptocurrency and blockchain. This user-friendly approach makes Bitcoin transactions accessible to gamers with no prior knowledge of cryptocurrency.
In March 2023, ZEBEDEE unveiled a new payment feature on its app that allows users to send money instantly to five jurisdictions, including the Philippines and Brazil, at minimal cost using the Lightning Network. This feature simplifies the process of sending and receiving Lightning payments, further lowering barriers to entry for users.
Expanding its reach, ZEBEDEE has also entered the African gaming market in April 2023, in addition to its operations in Brazil and the Philippines. Gamers in Africa can now send and receive small amounts of Bitcoin over Lightning while playing popular titles like Counter-Strike, thanks to ZEBEDEE’s partnership with crypto exchange platform Bitnob.
Through this partnership, African users can earn Bitcoin through Zebedee-powered apps and games, which serve as a second layer in games that replaces traditional in-game point rewards with satoshis, the smallest denomination of Bitcoin. These rewards can then be converted to local currencies like the Nigerian Naira using Bitnob. This innovative approach to gaming rewards opens up new possibilities for game developers to engage with players in Africa, where traditional fiat payment methods can be costly and limited.
Ben Cousens, ZEBEDEE’s Chief Strategy Officer, highlighted the advantages of Bitcoin-powered gaming rewards, stating, “If I’m Activision Blizzard or EA Games and I have 30 million players of my games in Africa, and I run tournaments or giveaways, I cannot pay those players on fiat rails — it is too expensive. I am limited to the U.S., and I lose money from loss of engagement. Try sending $0.01 to these territories on another rail.”
ZEBEDEE’s expansion into the African gaming market marks another milestone in their mission to revolutionize the gaming industry with Bitcoin integration.
ZEBEDEE, a leading fintech company specializing in Bitcoin services for the gaming industry, has partnered with Viker, a play-to-earn mobile games studio powered by ZEBEDEE’s Lightning infrastructure, to bring Bitcoin gaming to a global audience. Viker has already recorded over 80 million transactions across 100 countries, showcasing the wide adoption of its games. Recently, Viker announced the launch of two new games, Bitcoin Chess and Bitcoin Scratch, which offer Lightning Network rewards to players.
With its innovative solutions and strategic partnerships, ZEBEDEE continues to pave the way for Bitcoin adoption in the gaming world, offering new opportunities for gamers and developers alike to tap into the power of the Lightning Network and benefit from the potential of Bitcoin in gaming economies.
Live Streaming and Podcasts on Lightning Network
The integration of podcasts with the Lightning Network has made significant strides in recent times. The Lightning Network’s micropayments feature allows for almost free transactions, and it is rapidly gaining popularity.
Content creators can now take advantage of an open monetization platform with millions of users, and access new monetization options that were not previously available. Real-time payment streaming, micro-tipping, and other monetization strategies that were not feasible with traditional payment systems can now be easily implemented.
One of the new entrants to the market is VIDAR, which aims to engage audiences via paid calls, texts, and live streams.
VIDAR is revolutionizing the game for Lightning-powered livestreams, providing an easy way for creators to monetize their content and for audiences to support their favorite creators. With the Lightning Network’s low fees and lightning-fast transactions, VIDAR and other similar platforms are poised to revolutionize the world of podcasting and livestreaming.
Recently, Lightspark released a Lightning Network-enabled chrome wallet extension for real-time money streaming aimed at developers, content creators, and businesses — see below:
This extension includes time-based payment options, accepting small payments to build new monetization models, and leveraging the flexibility of the Lightning Network to grow businesses. These features are expected to contribute massively to the already fast-growing podcasts on Lightning, providing greater opportunities for content creators and their supporters.
Lightning Address Protocol: A New Innovation for Lightning Network Addresses
In early 2023, a new internet identifier for Bitcoin Lightning wallets was introduced called Lightning Address. This protocol is designed to make sending and receiving Bitcoin more intuitive, much like sending an email. With Lightning Address, anyone can easily send Bitcoin payments across the lightning network, without the need for complex codes or invoices.
Using the Lightning Network, users can send Bitcoins instantly, analogous to sending emails. Although it may appear comparable to email on the surface, the backend of the protocol abstracts the use of LN-URL from the user.
Lightning addresses are a simplified approach for anyone seeking to send bitcoins instantly over the Lightning Network. Rather than requiring a QR code, generating an invoice, or creating a lengthy string of text for an LN-URL, the Lightning Address can be utilized as a reusable payment address. As an illustration of Lightning Address in use, Bottlepay, a digital wallet provider in the UK and Europe, is a prime example — see below:
The majority of Bitcoin Lightning wallet providers have integrated Lightning Addresses into their systems, providing ease of use for their users.
Machankura: Non-Custodial Bitcoin Lightning Wallet for Offline Transactions
Africa, the second-largest continent in the world, has an internet penetration rate of only 43%, leaving over 740 million people without access to the internet. Due to the lack of internet connectivity and affordability, most Africans use feature phones with limited functionality. With almost half of the continent’s population being unbanked, providing basic financial services like payments, savings, and credit requires a unique solution.
Enter Machankura, a non-custodial digital wallet that enables people to send and receive bitcoin (BTC) without a smartphone or an internet connection. Machankura uses Unstructured Supplementary Service Data (USSD) technology, similar to Short Message Service (SMS) texting protocol, instead of the internet. USSD enables users to send and receive Bitcoin through basic feature phones with no need for an internet connection.
In sub-Saharan Africa, mobile money, a service that uses digital wallets on basic feature phones to provide payments, credit, and savings in local currency, has become popular. M-Pesa, created by Vodafone and Safaricom in Kenya, is an example of mobile money. One-third of adults in sub-Saharan Africa have a mobile money account, and in 2021, M-Pesa generated $765 million in revenue for Safaricom.
However, mobile money doesn’t offer global interoperability, which is where Machankura and Bitcoin come in. Machankura combines USSD technology with Bitcoin’s Lightning Network, a layer 2 scaling system that facilitates cheaper and faster Bitcoin transactions. Sending Bitcoin via Machankura incurs a 1% transaction fee, which is the platform’s revenue source.
To use Machankura, users dial a special code for their resident country and create a five-digit PIN. Once successfully registered, users can send, receive, and redeem Bitcoin through a menu that appears on their feature phone. One of Machankura’s unique features is its integration with personalized Lightning addresses, which are the length of a typical email handle (e.g. johndoe@8333.mobi), making them easier to type out on feature phones with multi-press text entry.
Since its launch in Q1 2023, Machankura has already attracted 3,000 active users. Its innovative solution provides financial services to unbanked Africans, paving the way for financial inclusion in the region.
Jack Dorsey’s Block Announces Lightning Network Business Called C=
TBD, a Bitcoin-focused subsidiary of Block, the company founded by Jack Dorsey, has unveiled its new Lightning Network initiative known as c=. This new venture aims to make the Lightning Network more reliable and usable for developers, merchants and their end customers by building infrastructure using Bitcoin from Block’s treasury.
According to TBD, c= will leverage the Bitcoin it is committing to the network to build infrastructure that can improve the reliability and liquidity of Lightning transactions. As a result, wallets and businesses can enjoy more dependable Lightning transactions.
By launching c=, TBD will have a significant presence in Lightning infrastructure, which is seen as the future of Bitcoin transactions. Nick Slaney, lead at c=, said the initiative will leverage the Bitcoin in Block’s treasury to grow the Lightning Network and their company in a mutually beneficial way.
Satimoto — EV Charging On Lightning
Satimoto is an innovative app that aims to revolutionize the electric vehicle charging industry in Europe by allowing users to pay for charging using Bitcoin over the Lightning Network. The app has already onboarded over 20,000 electric vehicle charging stations across the continent, making it easier for users to charge their vehicles at various locations.
Crowdfunding on Lightning — Geyser
Geyser, is a Lightning-native, non-custodial Bitcoin crowdfunding platform launch in 2022. The platform enables anyone worldwide to create and fund campaigns for their projects through a Lightning-native platform. Geyser’s unique feature is that it allows creators to launch their projects with a lightning address, providing a quick and easy payment solution.
With this feature, creators can receive payment instantly in their lightning wallets, resulting in a surge in the number of projects launched on Geyser (see below).
Geyser recently shared their 2022 in review, highlighting a massive growth in the number of projects launched on the platform. They distributed 320 million satoshis across 133 projects that went live from 40 different countries, demonstrating the platform’s worldwide reach.
Keet — P2P Video Chat Integrates Lightning Payments
Incorporating Lightning payments into its platform, Keet has expanded its offerings since its launch in July 2022 as a video chat application that emphasizes superior privacy and security features over mainstream Web2 centralized platforms like Zoom or Google Meet. Keet enables users to engage in direct peer-to-peer calls without any data stored on a server, ensuring complete privacy. Furthermore, all communication on the platform is fully encrypted with end-to-end encryption, providing an appealing option for users who value security and privacy in their online conversations.
Lightning Network’s Impressive Growth Metrics on Different Platforms
River Financial
River Financial, headquartered in San Francisco, is a client-centric financial institution that is committed to providing a wide range of financial products and services to empower their clients in leveraging the transformative potential of Bitcoin. As of 2022, River Financial has emerged as the fourth largest Lightning node in terms of capacity, with their second node closely following suit.
The significant size and impact of River Financial on the Lightning network necessitates a thorough understanding and analysis of the insights gleaned from being the fourth largest node. These insights shed light on the adoption and growth of the network, and provide valuable information.
In a recent report released by River Financial in October 2022, it was revealed that they had routed their one millionth Lightning transaction, with a staggering 75% of these transactions taking place within the last year alone.
This highlights the rapid pace of growth and adoption of the Lightning network facilitated by River Financial’s nodes. Since their inception, River Financial has cumulatively routed a total of 3,700 BTC through their nodes by the end of the year.
Growth Of Lightning-Enabled Podcasts
The Lightning Network’s capability for “real-time payment streaming” aligns perfectly with the essence of podcasting.
Currently, nearly 10,000 podcasts have embraced the Lightning Network, enabling podcasters to receive payments directly from their listeners while also allowing for payments to be split among guests and contributors. This podcasting movement has paved the way for over 10,000 podcasts to accept streaming payments via the Lightning Network, and this trend shows no signs of slowing down.
Growth On Lightning Wallets — Wallet Of Satoshi
Wallet of Satoshi, a custodial wallet for the Bitcoin Lightning Network, has become one of the most popular wallets available. Its widespread adoption and increasing usage have made it an excellent metric for gauging the organic user growth of the Lightning Network.
By analyzing Wallet of Satoshi’s usage statistics, we can gain valuable insights into how the Lightning Network and its associated wallets are faring in terms of real-world adoption. As the popularity of this wallet continues to grow, it serves as a positive indicator of the broader trend of increased adoption and usage of the Lightning Network for payment processing.
Wallet of Satoshi users have made more than six million Lightning Network payments since the app’s initial launch. Impressively, it took only 68 days for their last million payments, while it took 801 days to reach their first million payments. This trend shows that the adoption of the Lightning Network for payment processing is growing rapidly.
Currently, Wallet of Satoshi is on track to achieve yet another record month of Lightning payments. Despite the “crypto winter”, the latest statistics indicate that the wallet is averaging 31,500 Lightning payments per day in April. This positive trend is an excellent indicator of the growing demand for lightning-fast transactions with low fees.
Payment Processors
CoinGate, a prominent payment processor specializing in Bitcoin and other cryptocurrencies, boasts a sizeable user base of over 470,000 registered users, in addition to facilitating nearly three million transactions and merchant orders globally.
In 2022, CoinGate reported processing over 25,000 Lightning payments, an astounding 97% increase from the previous year. Moreover, the proportion of all Bitcoin payments conducted on the Lightning Network increased from 4.5% in 2021 to 6.3% in 2022.
How Emerging Markets Are Powering Lightning Growth
The adoption of the Lightning Network is rapidly increasing in emerging markets, especially in regions like Southeast Asia, sub-Saharan Africa, and Latin America. This growth is particularly pronounced in areas where “Bitcoin circular economies” have been established.
What Are Bitcoin Circular Economies?
Despite Bitcoin’s early stages of being recognized as a reliable store of value, individuals across the world are already using it as a payment method and settling transactions within their local communities. These communities operate under the principles of a BCE, where Bitcoin is the primary form of payment and unit of account. Rather than seeking permission or relying on third-party financial institutions that operate under the jurisdiction of state authorities, BCEs rely on Bitcoin to exchange value for goods and services. By leveraging the decentralized nature of Bitcoin, circular economies can operate independently without intermediaries, providing a more secure and efficient method of conducting local commerce.
The growth of BCEs has been staggering, especially in emerging markets, including Southeast Asia, sub-Saharan Africa, and Latin America. BCEs are rapidly expanding due to the ease and speed of Bitcoin transactions, which is mainly facilitated by the Lightning Network.
Merchants in Bitcoin circular economies accept Bitcoin directly, allowing users to make payments in BTC. A wide range of businesses, including restaurants, bars, hotels, retail outlets, and souvenir shops, have signed up to participate in these economies. The Lightning Network (LN) makes it possible to transact small amounts of Bitcoin instantly and with negligible fees, which is particularly important in BCEs where small businesses often operate on thin profit margins and cannot afford high transaction fees associated with traditional payment methods.
By enabling microtransactions, the Lightning Network has become an ideal solution for businesses operating in BCEs. As more businesses accept Bitcoin via Lightning, it encourages more people to use Bitcoin as a means of payment, further accelerating the growth of these economies.
DISCLAIMER: The information contained in this article is for educational purposes only and does not constitute any form of advice or recommendation by Wheatstones, and is not intended to be relied upon by users in making (or refraining from making) any investment decisions.
