Bear markets are for increasing capacity on the Lightning Network Layer 2. Despite macroeconomic headwinds and slow price action on the Lightning Network, the Bitcoin (BTC) Layer 2 payment solution continues to thrive.
The Bitcoin Lightning Network reached a milestone capacity of 5,000 BTC ($96 million). In effect, more and more Bitcoin is being introduced into 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) to send or receive money faster and with lower fees. The more capacity in the network, the more liquidity is on hand. As a result, users can experience faster payment speeds and potentially larger transaction volumes.
First created in 2018, the lighting network has recently come under fire. Bitcoin influencers like Udi Wertheimer have talked about the network”failure”, stating that no one uses The net. However, the network reached 4,000 BTC capacity in June and over the past four years has become a reliable payment network, popular in El Salvador, the Isle of Man and Gibraltar:
Bitcoin Senegal’s Nourou explains why LN is so important. 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 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 network should have enough capacity to support these microtransactions.”
Nicolas Burtey, CEO of Galoy, was one of the first to celebrate the achievement of 5,000 Bitcoins. 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.” He joked, “Actually, the bill should have been called the Lightning Act!”
— Nicolas Burtey ⚡️⚡️ (@nicolasburtey) October 3, 2022
Burtey went on to explain that while the 5,000 BTC metric is important, “Payout speed per channel is growing at an even faster rate. It’s a more meaningful metric, but only node operators can see it, of way it’s not as prominent in the media.”
The Lightning Network, once a space for Bitcoin enthusiasts, now attracts large corporations. Microstrategy is now hiring a Bitcoin Lightning Software Engineer. Microstrategy is the largest holder of Bitcoin among publicly traded companies with 130,000 BTC on its balance sheet.
Related: Raise a glass to Satoshi’s Place: The Challenge of Managing Bitcoin Businesses
Elsewhere, Strike, a Bitcoin Lightning startup led by Jack Mallers, raised $80 million to “revolutionize payments” for merchants. Mallers and Strike spearheaded El Salvador’s 2021 Bitcoin adoption plans.
For Nourou, who organizes the Dakar Bitcoin Days in December, the first major Bitcoin conference in Senegal, the milestone of 5,000 BTC is monumental: “An increase in BTC locked in the network and the number of channels open in parallel is another step towards the democratization of Bitcoin transactions in the world.”