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There was a time when scaling Bitcoin was the next step in development. It fueled the rise of the Bitcoin Lightning Network in 2018. Over time, however, the hype and functionality of the L2 payment protocol has become a distant memory. Whether it is the store of value narrative or Bitcoin referred to as “digital gold,” few speculators now worry about its credentials as a mode of transaction.
Between February 2020 and 2021, its growth was not really spectacular either, with total capacity dropping from 886 BTC to just 1095 (23%). And yet, it might be time to revisit the state of lightning as there have been some changes.
Bitcoin Lightning strikes back
Source: Arcane Research
Since early March 2021, Bitcoin locked on the Lightning Network has increased parabolically, nearly doubling its tally from 1,095 to 2,087.87 BTC at the time of publication. The number of nodes also doubled, reaching 23,880. A significant number of channels were also seen on 1ml.com at the time of writing, reaching 60,978.
Right now, if Lightning is able to maintain the same growth rate, the L2 scaling solution will exceed 10,000 BTC capacity by March 2022.
Now the Lightning channel is used to transfer small Bitcoin transactions. Additionally, during the resurgence period, the number of Bitcoin addresses containing between 0.01 and 1 BTC also improved.
Source: Coinmetrics
There were 8.17 million addresses containing 0.01-1 BTC on May 11. As of July 28, however, there were 8.25 million addresses containing 0.01-1 BTC.
Is this period of growth legitimate?
Now, if we take a step back in the history of Lightning, it was developed to facilitate cheaper and faster transactions. But over time other networks have done better and Lightning remains a victim of slow development. Many users are not amused by its growth rate, which was pretty obvious between February 2020-2021.
However, after the Salvadoran government announced Bitcoin as legal tender, the narrative may have changed somewhat. With a country making it legal to facilitate transactions through Bitcoin, the Lightning Network is currently seeing a higher rate of exposure and demand.
This narrative will only expand if other countries or associations start accepting Bitcoin payments. Talk about coming back from the dead, Bitcoin lightning may not be over yet.
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