The Lightning network is one layer-2 scaling solution that allows bitcoin (BTC) to be used as a means of payment in everyday life. The Bitcoin network is able to process only seven transactions per second and the Lightning Network makes it possible to send transactions with BTC at lightning speed and cheaply.
Bitcoin Lightning Network adoption is growing
The capacity of the Lightning Network has recently increased to a new one all time high of 5,363.90 BTC, according to data from Lookintobitcoin.com. When there is more capacity in the Lightning Network, there is more liquidity for users. This means that users experience faster payment speeds and potentially higher transaction volumes.
While liquidity on the LN has consistently increased, the number of payment channels on the peer to peer network fell dramatically in November following the collapse of FTX. The LN uses so-called payment channels between two parties. Once this channel is set up, an unlimited amount of transactions can take place between both parties without the Bitcoin blockchain being burdened.
However, the previous growth seems to have resumed since the turn of the year, as more than 2,000 new payment channels have already been added in 2023.
Payment app Strike
In a Valkyrie Investments report states that the adoption of the LN in emerging markets such as South America and Africa has accelerated thanks to the mobile payment application Strike. In December 2022, the company launched a remittance service based on the LN which offers free transfers from the United States to Nigeria, Ghana and Kenya. It later announced a similar program for the Philippines.
Recently, Strike also announced dollar payments using the LN. The app converts US dollars to BTC in the background and back to dollars at the final destination.
BTC payments on decentralized Twitter
The LN has also been boosted by the launch of Nostr, a simple, open protocol that enables global, decentralized, censorship-resistant social media. The protocol allows to build social media applications on it.
With Damus, the decentralized Twitter alternative on IOS, users can earn bitcoin with their posts. More than 625,000 people are currently registered on Nostr, which will aid adoption of Bitcoin’s layer-2 scaling solution.