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Bitcoin's lightning network capability (ln) has recently surpassed a record of 5,000 Bitcoin ().
The lightning grid is a neutral protocol built on top of Bitcoin, and it does not currently have a "native" token attached to it as many decentralized finance platforms (defi).
Although the total liquidity of the lightning network is less than 0.5% of the aether () in the challenge agreements, the upward trend of Bitcoin's ln capacity against a downward trend in the locked eth amount in smart deals is encouraging for ln development.
As liquidity on the LN continued to increase, the number of channels on the peer-to-peer network fell dramatically in November following the collapse of the FTX. It could be due to the EXODUS of miners operating ln nodes in addition to the exploitation of mining clients.
However, the likely end of miner capitulation and the rise of Bitcoin-based applications like nonfungible tokens could mark an end to LN channel capitulation. Since early 2023, more than 2,000 additional channels have been added to the network.
A Valkyrie Investments report states that LN adoption is picking up speed in emerging markets like South America and Africa, primarily due to efforts of the LN mobile payment application Strike.
In December 2022, the firm launched an LN-based remittance service in Africa. It offers free transfers from the USA to Africans in Nigeria, Ghana and Kenya. Subsequently, a similar program was announced in the Philippines.
More recently, the company has announced payments in dollars through LN, where users can potentially send dollars out of the strike's cash balance to savings accounts and Visa. The application will convert USD to P/E in the background and convert to USD at destination. Since ln is fast and inexpensive, the risk because of the volatility of Bitcoin prices is minimal.
International payments from the United States can cost as much as $45 per transaction, with transfers taking hours or sometimes days to complete. As a result, users may begin to prefer payments based on strike versus traditional payment channels.
A recent report from Marty Bent found that the LN payments have risen this year on one of the top Lightning Network wallets, Wallet of Satoshi. In addition, Podcast 2.0, a podcast platform that accepts ln payments, has also seen an increase in advice for creators.
Related: Retail giant Pick n Pay to accept Bitcoin in 1,628 stores across South Africa
Nostr is boosting LN adoption
Another factor influencing LN uptake is the introduction of Nostr. According to the github page of the protocol, nostr is a simple and open protocol which allows global social media, decentralized and resistant to censorship. Protocol provides the ability to build social media applications.
Damus, a competitor of twitter, is built on nostr and has one app ios and android. The idea of an open, free social media network reverberates strongly in the crypto space, with Bitcoin pioneers like Jack Dorsey and Adam Back having strongly endorsed Nostr.
In addition to their ideological similarities, nostr can stimulate ln adoption, as damus has incorporated various ln portfolios as satoshi portfolio, strike, bluewallet and others. According to a report from LN analyst Kevin Rooke, over 600,000 users have signed up for Nostr. It might help users on board ln, as nostr supports the Bitcoin payment network by nostr zap.
Although ln does not have a native token, ln nodes may earn fees to facilitate transactions and provide cash. However, at present, the gains are insignificant. Hence, the Lightning Network’s growth appears to be organic, and it’s well-positioned to become the leading global payment network — as prominent personalities in the space have predicted.
There are no investment tips or recommendations in this article. Every investment and negotiation movement involves risk, and readers should conduct their own research when deciding.
