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New record for Lightning Network

2 min read

The capacity of Lightning Network, the second layer of BTC, increased in 2021. The year began at approximately 1,050 BTCs locked in the LN network, which is roughly the same level as the previous peak in May 2019, but has started to grow since February.

ATH for Lightning Network

At the end of February, the number had already exceeded 1,100 BTC and continued in March. Growth came to a temporary halt around mid-April, when the price of BTC reached its all-time high and then began to fall. However, there has been a real increase since the end of April. In just two months, the number of BTCs locked up in the Lightning Network has increased by 47%.

 

Looking at the chart, we see that the total value of LTC tied to LN in US dollars is very similar today to the value from mid-May, ie. days before the fall of May 19. So it is possible that the increase over the last 50 days somehow depends on the fall in the price of the dollar.

In any case, the number of BTCs locked in the Lightning Network is currently at a new all-time high above 1,700 BTC. As for the volume of the dollar, the highest peak was, of course, recorded on April 14 at almost $ 77 million, a day when the all-time high of the BTC price was also recorded.

BitcoinVisuals.com chart

However, this figure is very low, especially compared to figures for other services, which are similar in some respects. For example, the volume of BTCs locked in the Wrapped BTC (WBTC) protocol is $ 6.7 billion, several orders of magnitude higher.

While LN now serves mainly as a means of payment, WBTC is mainly used in the DeFi protocols on Ethere, ie. for speculative or purely financial purposes.

It is possible that the rise in LN is also due to the use of BTC as a means of payment in countries such as El Salvador, where one of the most downloaded applications of all time is the BTC wallet on the Lightning Network.

However, it is worth noting that the success of LN will always be associated with BTC payments, as decentralized protocols are also being developed on the Lightning Network to enable token exchange and BTC trading. The eventual success of these protocols, which allow for almost immediate exchanges at very low cost, could lead to much higher numbers of bitcoins locked to the LN.

The growth of LN also solves one of BTC’s main problems, slow and expensive transactions, because at Lightning Network it is possible to send BTC almost at no cost and receive it almost immediately.

What is your opinion on Ligtning Network?

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All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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