The layer 2 Lightning Network of Bitcoin has witnessed an estimated growth of 1,212% in just two years. In August, there were approximately 6.6 million routed transactions, a significant surge compared to the 503,000 transactions recorded in August 2021, according to data provided by the Bitcoin-only exchange, River.
Despite a 44% decline in Bitcoin’s price and reduced online search interest, River research analyst Sam Wouters explained in a report on October 10 that the increase in routed transactions, which involve more than two nodes to facilitate transfers, is proof that the notion that “nobody is using Lightning” is obsolete.
“Nobody is using Lightning” should now be a dead meme.
Launching a new #Bitcoin report from @River: How the Lightning Network grew by 1212% in 2 years ⚡
It’s time to pay attention to the incredible work of so many people in the space Link below in the pic.twitter.com/FuGLwGHR4R
— Sam Wouters (@SDWouters) October 10, 2023
The 6.6 million figure for Lightning routed transactions provided by River is a lower-bound estimate and represents the lowest possible value that could be assessed. Additionally, the August 2021 figure of 503,000 transactions was sourced from a study conducted by K33, formerly known as Arcane Research. River’s data does not include private Lightning transactions or transactions between only two participants.
In August 2023, the Lightning Network processed a transaction volume worth $78.2 million, marking a 546% increase from the $12.1 million figure recorded in August 2021, sourced from K33. Wouters highlighted that Lightning is now handling at least 47% of Bitcoin’s on-chain transactions.
“This will be an interesting metric to monitor,” he added. “It is an indicator of Bitcoin becoming more of a medium of exchange.”
The average size of a Lightning transaction was around 44,700 satoshis or $11.84 in August 2023. River estimated that between 279,000 and 1.1 million active Lightning users were present in September.
River attributed 27% of the transaction growth to the gaming, social media tipping, and streaming sectors.
In August 2023, River reported a 99.7% success rate for Lightning payments across 308,000 transactions on its platform. Failure usually occurs when there is insufficient liquidity to facilitate the transfer.
River’s data set included 2.5 million transactions. The nodes in the data set make up 29% of the network’s total capacity and 10% of the payment channels.
Image Source: Mc_Cloud @ShutterStock
