Lightning Network Bitcoin has increased Bitcoin payments’ speed and allowed even more users to send Bitcoin payments. It also at least gives Bitcoin a square off about mass adoption.
The Lightning Network also posted a record number of Bitcoins used on the network. Twitter is testing the technology to allow its users to send bitcoin tips to each other.
However, much work remains to be done to make payment networks easier to use, safer, and more private.
Lightning Network Bitcoin Breaks Records
What are the records? Check out his review below.
Lightning Network Usage Doubles Faster
The number of active Lighting Network nodes as of January 30th surpassed 20,000 for the first time. That means the number of active nodes has more than doubled in just over 10 months—or four months faster than it took to double the total from 5,000 to 10,000.
This means that adoption of the Lightning Network is increasing at a faster rate, helped by Latin American countries, notably El Salvador, whose Chivo system runs on the Lightning Network.
Along with this rapid increase in nodes, there has also been an equally dramatic increase in the number of channels, with the network now having more than 83,000 unique payment channels, which is already doubling at the same rate as nodes.
3,400 Bitcoin Now Held in Channel
After nearly two years of stagnation—between 2019 and 2021—the last 12 months have seen an “explosion” in Bitcoin now on the network, which is known to jump from 1,060 in early 2021 to 3,320 a year later.
That surprising rise takes into account two Bitcoin price crashes in 2021, which don’t seem to affect actual adoption at all. This extraordinary increase puts the USD value of BTC now on the Lighting Network at $146.5 million. That figure was almost unbelievable just six months ago.
The fact that Bitcoin Lightning Network adoption continues to grow despite the big price correction is a sign that Bitcoin adoption is growing at a truly attractive rate almost every day.
Some Advances on the Bitcoin Lightning Network
These are the following of some of the major Lightning protocol developments that are making progress. The list is as follows.
This year, Lightning got a big boost from the November activation of Taproot, the biggest change to Bitcoin in four years. The addition of the Schnorr Taproot signature makes it possible to add new privacy enhancements to Lightning. However, there is still a lot of work ahead to bring about these privacy enhancements.
The developers of this network have prepared various ways to make it easier to find and retrieve the liquidity you need. In the last year, several tools emerged to deal with this problem.
In late 2020, Lightning Labs introduced Pool. This marketplace for buying and selling important liquidity is known to give developers a better interface for tracking it.
Then, in 2021, Lightning Labs launched “sidecar channels”—an easy way to also use the market to help others get liquidity to enter easily for a fee. On top of that, Bitcoin tech startup Blockstream also opened its first double-funded channel on the mainnet last May.
In addition, there is also another proposal that is being worked on for the Lightning Network, namely paying a fee when “closing” the channel. A user must set an initial closing fee when they open a channel.
“Anchor outputs” is a feature created to allow such cost increases. The three leading code implementations of the Lightning Network, namely LND, C-lightning, and Eclair, will all implement anchor output in some form by 2021.
A project led by Bitcoin Core contributor Gloria Zhao called “package relay” offers a way to solve this problem by packaging parent and child transactions together, ensuring that these fee-heavy transactions are not ignored. The feature made a lot of progress this year although it hasn’t been fully integrated into the codebase yet.
In recent years, the ad hoc standard LNURL has offered a way of dealing with the ever-present invoicing problem. This way, users can receive multiple payments using the same Lightning invoice.
Another proposal begins to develop in 2021. These are known as “offers”, championed by Blockstream Lightning developer Rusty Russell and standardized in BOLT 12.
The reliability of Lightning payments which does not always work well, especially if the payouts are larger, is also a problem in itself. In response to this, Lightning Researchers Rene Pickhardt and Stefan Richter later published a paper describing a nifty new routing method, which could improve the reliability of Lightning payments.
In this case, Pickhardt and Richter take another approach, which is to look at the likelihood that the payment will be successful based on the size of the channel in the path, while also considering the cheapest option in terms of cost.
C-lightning has already implemented an experimental first version of the new routing mechanism, which has managed to route payments more reliably, as the authors of the paper hypothesized.
Lightning Network Bitcoin is even easier to use and more reliable and private with all these changes. This year, Lightning developers are looking to expand on these changes in hopes of helping everyday Lightning payment users.