- The Lightning Network has witnessed a whopping 1,212% growth over two years.
- In August 2023, $78.2 million in transaction volume flowed through Lightning, up by 546% from the previous year.
Drawing upon a recent update from Cointelegraph, Bitcoin’s Lightning Network, often recognized as its layer 2 solution, has undergone an impressive surge in its usage over the past two years.
Stellar Growth Despite Bitcoin’s Slump
In a span of 24 months, the Lightning Network saw its transaction numbers rise from 503,000 in August 2021 to approximately 6.6 million in August 2023. This astronomical increase occurred even as Bitcoin’s price dropped by 44% and the digital currency saw diminishing online search interest. Addressing the popular skepticism around Lightning’s usage, Sam Wouters, River’s research analyst, recently remarked on X (formerly Twitter),
“Nobody is using Lightning” should now be a dead meme.
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
It’s worth noting that River’s figure of 6.6 million for Lightning-transactions is a conservative estimate. The data for August 2021’s 503,000 transactions was sourced from a study by K33, previously known as Arcane Research.
Lightning’s Dominance in Bitcoin Transactions
An astonishing $78.2 million was processed via the Lightning Network in August 2023 alone. This marks a significant leap of 546% from the $12.1 million recorded in August 2021. Highlighting Lightning’s growing importance, Wouters shared that nearly 47% of Bitcoin’s on-chain transactions are now being handled by the network. “This will be an interesting metric to monitor,” Wouters commented, hinting at the potential of Bitcoin evolving as a dominant medium of exchange.
Breakdown of Lightning’s Users and Transaction Causes
By August 2023, the typical transaction size on the Lightning Network hovered around 44,700 satoshis or $11.84. Based on River’s estimates, the month of September saw an active user base ranging from 279,000 to 1.1 million for Lightning. Diving deeper into the cause behind this transaction growth, River attributed a substantial 27% to sectors like gaming, social media tipping, and streaming.
A significant highlight from River’s report reveals a 99.7% success rate for Lightning payments on its platform for the month of August 2023, spread across 308,000 transactions. The primary reason for transaction failures was attributed to insufficient liquidity in the available payment routes.
To ensure a comprehensive analysis, River considered a dataset of 2.5 million transactions. The nodes represented in River’s data encompass 29% of the total capacity on the network and account for 10% of payment channels.