Lightning Network Erupts 1600% Since February

Amid a grinding bear market, the Lightning Network looks like it's picking up the pace as it begins to mature.

Early adopters of the Lightning Network may find a reason to be optimistic as the technology begins reaching unprecedented levels of adoption, adding several nodes to the network and a significant amount of Bitcoin to boot.

In February this year, the network had 1,000 channels at a value of 4 BTC. In the following months, the number of channels kept growing at a steady rate, but the quantity of Bitcoin hadn’t kept pace.

This was pretty much the status quo until mid-November, when a sudden influx of adoption brought the number of channels up to 16,000 and the total market capitalization of the network to over 450 BTC. That’s a 1,600% increase in adoption and a 10,000% increase in capital compared to the February milestone.

This sudden burst happened aroundthesame dayas the dramatic Bitcoin Cash split that led to the creation of Bitcoin SV. One could be forgiven for thinking that this event was a one-off ordeal, but the numbers kept growing steadily into December.

As of right now, the LN has16,677 channelswith a total of 461.1184 BTC in its coffers. The fact that channels that came around the time of the BCH/BSV debacle and chose to remain there suggests that there are more complex motives behind such a migration.

First of all, it’s not so much a flight to another cryptocurrency as it is a departure from the traditional ecosystem entirely into a platform that’s layered on top of a blockchain.

Transactions that happen on the LN don’t register on the Bitcoin blockchain until a channel is closed, providing what could be perceived as an extra shield against the fragility of a cryptocurrency as it’s going through a split.

When a hard fork hits, people holding the coins involved in the network the fork is splitting form are left with the onus of making arrangements to make sure that their coins survive the ordeal. The BCH/BSV split may have sent a signal that it’s better to place trust in a network that would theoretically eliminate some of this burden.

Although it’s only ever been seen in obscure coins like the Triton Project, larger cryptocurrencies aren’t completely immune to the idea of a user coming back to a wallet after months of inactivity to find that it is now worthless and that there is no recourse.