The Bitcoin lightning network is growing fast. The number of nodes in the network and the bitcoin capacity are increasing exponentially. Umbrella, free, open-source software with which you can run a Bitcoin and Lightning node, is extremely popular due to its user-friendliness. No fewer than 9 out of 10 new lightning nodes use the software.
One of the basic tenets of Bitcoin is that anyone can independently monitor transactions on the blockchain to make sure everything is correct. You do this with special software that downloads and checks all transaction information from the blockchain. You then have a so-called Bitcoin node. When you connect a Bitcoin wallet to it, you can ensure that your wallet has the correct transaction history.
The Lightning Network is a network protocol and so-called second-layer scalability solution, with which bitcoin payments are lightning-fast and cheap. You can make a bitcoin transaction with it for just a few almost instant satoshis without being at the expense of decentralization. The technology is still under development.
The Lightning Network works based on payment channels that users open to each other, with which mutual bitcoin transactions can be made ‘off-chain’. Only the final settlement is registered on the blockchain. The usual transaction costs on the blockchain and the block time of 10 minutes are therefore hardly applicable anymore. It also provides privacy benefits.
For the first two years, developers mainly used the new technology on the Bitcoin network. Now, among others, El Salvador uses the Lightning Network with the Chivo wallet, Twitter with the tipping function, Substack with subscriptions and many others.
The numbers, all three as of the beginning of this year, are clear:
Number of Bitcoin on the Lightning network: ~3080 BTC (193% growth)
Number of active Lightning nodes: ~ 27,950 (81% growth)
Number of active channels: ~ 76,265 (111% growth)
These are minimal estimates because it is unknown how many remote nodes and channels there are in the network. According to a study by Bitmex, only 72.2% of Lightning channels are publicly known.
Umbrella is free open source software for a Raspberry Pi minicomputer, with which you can easily set up a Bitcoin and Lightning node. Currently, Raspberry Pis are sold out almost everywhere due to chip shortage and high demand.
The strong growth in the number of nodes in the Bitcoin Lightning Network is partly due to the user-friendly software. Umbrella has made sure that anyone, even if they don’t have a technical background, can run a Lightning node. In the Netherlands, running your node is popular among bitcoiners. With about 377 nodes, we are number 4 on the list of countries with the most nodes, above Canada and the United Kingdom.
According to profit-maximizer.app , Legalizing bitcoin in El Salvador is perhaps the major news of the past year. It obliges every company to accept Bitcoin for all kinds of transactions. As a result, people can make payments with both on-chain and Lightning. For example, watch a video of Aaron from the Bitcoin Show making a Bitcoin Lightning payment at a Pizza hut in El Salvador.
The government-sponsored Chivo wallet also uses the Lightning network. As a result, the app has over 3 million downloads in less than a month. Therefore, El Salvador’s bitcoin adoption is reflected in the growing liquidity on the lightning network.
In addition to making it easier for bitcoiners to run a lightning node and the first country to embrace bitcoin (Lightning), attention to the lightning network is also growing among companies. Twitter and Substack, among others, have implemented the second layer of the Bitcoin network.
The social media platform will use the tipping function to ensure that the 330 million monthly active users can quickly receive bitcoin. For now, it is only iOS users who can do this. Twitter is partnering with Strike for the implementation of bitcoin Lightning. Currently, the ‘regular’ Bitcoin network has about ~200 million users. It was as many as the internet in 1997. As this number grows, the importance of the Lightning network will become more and more critical, according to Arcane Research. The researchers expect no fewer than 700 million users by 2030.