Bear markets are for increasing layer 2 capacity; Lightning Network. Despite macroeconomic headwinds and slow prices, the Lightning Network, Bitcoin’s (BTC) layer 2 payments solution, continues to thrive.
The Bitcoin Lightning Network has reached a capacity milestone of 5,000 BTC ($96 million). Indeed, more and more bitcoins are being introduced to Lightning Network payment channels around the world as Bitcoiners continue to support the growth of the network.
The Lightning Network allows users to send Bitcoin (or satoshis, the smallest amount of a Bitcoin) as a payment method or to receive money faster and with lower fees. The more capacity the network has, the more liquidity there will be. As a result, users can experience faster checkout speeds and potentially higher transaction volumes.
First created in 2018, the Lighting Network has recently come under fire. Bitcoin influencers such as Udi Wertheimer have discussed the “failure” of the network, stating that no one uses it. Nonetheless, the network reached a capacity of 4,000 BTC in June and over the past four years has become a trusted payment network, popular in El Salvador, the Isle of Man, and Gibraltar:
Nourou from Bitcoin Senegal explains why the Lightning Network is so important. As he told Cointelegraph, “In Senegal, we have an economy of 50 FCFA. That is, Senegalese from the working and proletarian class, who represent the majority of the population, buy for their breakfast 50 FCFA (0.07€) of milk, sugar , coffee, water and many other basic products”.
“Microtransactions are our economic reality. For Bitcoin to become the standard in the coming years, and in our economies, the Lightning Netwoek would have to have enough capacity to support these microtransactions.”
Nicolas Burtey, CEO of Galoy, was one of the first to celebrate the 5,000 Bitcoin achievement. Burtey told Cointelegraph that the adoption of Bitcoin in El Salvador was the turning point for the Lightning Network. This is where all the metrics really started to take off. And he joked, “The bill should have been called the Lightning Act!”
— Nicolas Burtey âš¡ï¸ âš¡ï¸ (@nicolasburtey) October 3, 2022
Burtey went on to explain that while the 5,000 BTC metric is important, “Payment speed per channel is growing at an even faster rate. It’s a more meaningful metric, but only node operators can see it, so they don’t It’s so prominent in the media.”
The Lightning Network, once a space for Bitcoin enthusiasts, is now attracting large companies. Microstrategy is hiring a Bitcoin Lightning Network Software Engineer. Microstrategy is the largest Bitcoin holder among publicly traded companies, with 130,000 BTC on its balance sheet.
Separately, Strike, a Lightning Network company run by Jack Mallers, raised $80 million to “revolutionize payments” for merchants. Mallers and Strike spearheaded Bitcoin adoption plans in El Salvador in 2021.
For Nourou, who will host Dakar Bitcoin Days in December, the first major Bitcoin conference in Senegal, the 5,000 BTC milestone is monumental: “The rise of BTC locked in the network and the number of channels opened in parallel It is one more step towards the democratization of Bitcoin transactions in the world.”
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