Channel capacity on the Lightning Network has grown by over 200% in the past six weeks, allowing the network’s capacity as a whole managed to surpass the $2m mark.
According to data collected by Bitcoin Visuals, a Bitcoin (BTC) statistics site, daily median capacities were at around 1.1m Satoshis (SAT) at the start of November, but suddenly increased towards the end of the month. It was at around 2m SAT by November 20th and increased still further to 3.2m SAT a few days afterward.
Growth has flattened since the beginning of December; median capacity per channel stood at 3.25m SAT at the time of writing, worth 0.032 BTC or roughly $123 at current prices.
Looking closely at the data, most of the growth has originated in nodes with larger channels. Daily capacity has increased from 2.5m SAT to 16.7m SAT for the 90th percentile, since the start of November. This represents a far larger growth on average compared to those channels with smaller daily capacities. Nodes in the 10th percentile are currently up to 50,000 SAT, from the 20,000 SAT capacity they were earlier this month.
Lightning Network Channels
BTC transactions can be slow and expensive; although confirmations usually take around 10 minutes, during busy periods, this can sometimes extend up to an hour.
The Lightning Network is a payments protocol designed to make the Bitcoin network scalable, with nearly-instant transactions and sub-satoshi fees. Transactions do not actually take place on the blockchain until a channel is closed.
There are currently more than 2,100 active nodes, connected by over 15,000 channels. Launching in mid-January it first reached 1,000 active nodes in the middle of April; the 2,000 node mark was only reached late last week, on December 19th.
Stickers, Gambling, Fine Art?
There has also been an increase in the number of merchants who have incorporated the Lightning Network into parts of their businesses. Although gambling dominates, there are also a few stores selling real-world goods, including a bike-parts site and a Libertarian clothes outlet. Four more businesses started using the payments protocol in the past week, according to Mainnet Lightning Network Stores.
The network is also expanding to the world of fine art. Last week saw the auction and sale of “Black Swan,” a composition on the unusual medium of “fiat and counterfeit detector pen ink.” Unlike the average art auction, the artwork went to the lowest bidder. At one thousandth of a satoshi -around $0.000000037 – Black Swan proves that your parents were right about artists not making any money.
The artist, who goes by the Twitter handle @cryptograffiti, told Crypto Briefing by email that his goal was twofold: first, to “spread awareness about the lightning network,” and second, to poke fun at the media’s obsession with prices.
That doesn’t mean the scaling solution doesn’t have shortcomings, as Crypto Briefing has reported before. Meanwhile, the Lightning Network continues to pass milestones in usability. The total amount of Bitcoin stored in its channels surpassed 500 BTC on December 25th, despite the sudden Christmas crash. At current prices, this means that the payment protocol has been used to send and receive more than $2m worth of bitcoin transactions.
This may be a promising sign people are still using bitcoin regardless of the price; hopefully, it won’t be a flash in the pan.
The author is invested in digital assets, including BTC which is mentioned in this article.