Bitcoin Lightning Network Growth Increases 1,200% In 2 Years

Bitcoin's Layer 2 Lightning Network has grown by an estimated 1,212% in two years, reaching 6.6 million transactions in August, a significant jump compared to 503,000 transactions in August 2021, according to data from Bitcoin (BTC)-only exchange River.

In an Oct. 10 report, River Research analyst Sam Waters noted that the jump in indirect transactions — which use more than two nodes to facilitate the transfer — came despite a 44% drop in Bitcoin's price and much less demand for online searches.

“‘Nobody uses Lightning' should be a dead meme by now,” Wouters said in an Oct. 10 follow-up X (Twitter) post, firing back at Lightning critics.

“No one uses lightning” should be a dead meme by now.

Launching a new #Bitcoin report from @River: How the Lightning Network grew by 1212% in 2 years ⚡

It's time to spotlight the amazing work of so many people in the space link below pic.twitter.com/FuGLwGHR4R

— Sam Wouters (@SDWouters) October 10, 2023

River's figure of 6.6 million is the lowest estimate of lightning transactions – the smallest value that can be assessed. The firm added that the August 2021, 503,000-image K33 survey from the former Arcane Research could not assess private lightning transactions or between two participants.

A transaction volume of $78.2 million was transacted on Lightning in August 2023, a 546 percent increase from the $12.1 million figure achieved by K33 in August 2021. According to Waters, Lightning is now processing at least 47% of Bitcoin's on-chain transactions.

“This will be an interesting metric to watch,” he added. “This is an indication that Bitcoin is becoming more of a medium of exchange.”

In August 2023, the average Lightning transaction volume was about 44,700 satoshis or $11.84. Lightning users are estimated to be between 279,000 and 1.1 million in September.

The firm attributed 27 percent of its sales growth to the gaming, social media recommendation and streaming sectors.

Related: Coinbase to integrate Bitcoin Lightning Network: CEO Brian Armstrong

River says Lightning Payment's success rate is 99.7% in August 2023 with 308,000 transactions on the platform. The main cause of failure is the lack of liquid payment channels to facilitate the transfer.

The river data set consisted of 2.5 million transactions. The nodes in the river dataset represent 29% of all capacity and 10% of toll stations on the network.

Magazine: 6 Questions for Kei Oda: From Goldman Sachs to Currency