Bitcoin: new record for the Lightning Network

The capacity of Lightning Network , the second layer of Bitcoin, had a real surge in 2021. 

The year started with around 1,050 BTC immobilized on the LN network , which is more or less the same level as the previous historical peak of May 2019, but starting in February it started to grow. 

In fact, at the end of February it had already exceeded 1,100 BTC , and in March it continued to rise. 

Growth temporarily halted around mid-April, when the price of bitcoin hit its all-time high and then began to decline. 

However, there has been a real surge since the end of April. In fact, in just over two months the number of BTC immobilized on Lightning Network has grown by 47%. 

Looking at the graph in dollars, and not in BTC, however, it can be seen that the total value in US dollars of the bitcoins immobilized on LN to date is very similar to that of mid-May, i.e. the days before the flash crash of the price of 19 May. So it is possible that the surge in the last 50 days is somehow due to the drop in the dollar price. 

In any case, at this moment the number of bitcoins immobilized on the Lightning Network has reached a new all-time high above 1,700 BTC. 

As for the volume in dollars, on the other hand, the maximum peak was obviously recorded on April 14 at almost 77 million dollars, which is the day when the historical peak of the price of bitcoin in dollars was also recorded. 

However, this last figure still appears decidedly low, especially when compared with that of other services in some ways similar. 

For example, the volume of bitcoins immobilized on the Wrapped Bitcoin (WBTC) protocol is 6.7 billion dollars, or a couple of orders of magnitude higher. 

However, while LN today serves mainly as a means of payment, WBTC instead is used above all within the DeFi protocols on Ethereum, or with speculative or purely financial purposes. 

Bitcoin and the Lightning Network boom

For example, it is possible that the LN boom following the flash crash of 19 May is also due to the use of bitcoin as a means of exchange in countries such as El Salvador, where among the most downloaded apps there are Bitcoin wallets based on Lightning. Network. 

However, we must not believe that LN’s success will always and only remain linked to payments in BTC, because decentralized protocols are also being developed on the Lightning Network that allow for example token exchanges and bitcoin trading. A possible success of these protocols, which allow almost instantaneous exchanges and at very low costs, could lead the bitcoins immobilized on LN to widely exceed 2,000 BTC, and perhaps even much more, perhaps aiming in the long term to even exceed almost 200,000 BTC. immobilized for example on Wrapped Bitcoin. 

The growth of LN also solves one of the main problems of Bitcoin, namely slow and expensive transactions, since with the Lightning Network you can send BTC at almost negligible costs , and receive them almost instantly. If this is a minor problem for those who work with large quantities of bitcoins, it becomes very important for those who instead operate with limited or decidedly limited quantities.

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