Only 14 crypto exchanges use the Bitcoin Lightning Network

The Bitcoin Lightning Network is a beacon of innovation in the crypto market. However, despite its growing popularity and significant increase in users – now more than 328 million – a small fraction of crypto exchanges have adopted this technology.

While the Lightning Network's adoption journey faces challenges, it has the potential to gain widespread adoption in the crypto industry.

Bitcoin Lightning Network Limited Adoption by Crypto Exchanges

A report from leading Bitcoin infrastructure company Kaminari shows that the user base of the Lightning Network will grow exponentially by 2024. Major exchanges such as Binance and OKX have adopted this technology and contributed to its expanded reach.

However, market data shows that only 14 out of 224 active centralized crypto exchanges have integrated the Lightning Network.

“Cryptocurrency exchanges are the most used applications in the crypto ecosystem. As of August 2023, Binance alone has 150 million users. OKX has 50 million, and worth mentioning is Bitstamp, which has 5 million users.” [Still,] “Currently, 6% of crypto exchanges use the Lightning Network to conduct transactions with Bitcoin,” Kaminari analysts confirmed.

This slow adoption rate raises questions about the network's scalability and user-friendliness, especially for retail users. The benefits of facilitating fast and cost-effective Bitcoin transactions, the technical complexities of the Lightning Network, and the high-fee environment have made its use largely guarded.

This trend can be seen in the limited but growing number of crypto wallets that incorporate Lightning Network technology.

“Among over 350 analyzed wallets, only 30 (15 custodian and 14 non-custodian) are integrated Lightning. Notably, among the Top-10 most popular wallets by number of users, only Exodus and BitPay received Lightning. These findings point to significant room for expansion of the user base through widespread wallet integration,” Caminari analysts added.

Great for micro BTC transactions with low fees.

The Bitcoin blockchain itself continues to show strong growth, with a record number of transactions recorded in 2023. This strength, reflected in the lightning network's expanding node count and capacity, highlights the potential for further adoption and consolidation in the crypto market.

In the gaming and gambling sector, Lightning Network is emerging as the preferred choice. The fast transaction speed and low costs match the low deposit trends of online casino users.

Additionally, the introduction of Statcoins to the Bitcoin blockchain is set to transform the stable coin market. The migration of billions of dollars in USDT transactions from Tron and Ethereum to the Lightning network could dramatically change the stablecoin sector.

“If 5-10% of Tether transactions are transferred to the Lightning Network, according to our forecasts, the annual profit could reach 257 – 514 billion USD. As Statcoins users become aware of the benefits of Lightning, these figures are expected to grow significantly. Introduction of Tether (USDT) to the Lightning Network Stable Coin It will be a pivotal moment in shaping the market landscape,” Kaminari analysts pointed out.

Read more: Why the Bitcoin Lightning Network could be better than Visa and Mastercard

The Lightning Network's growth trajectory is set for rapid expansion in the coming years, providing great opportunities for those who can harness its innovative capabilities. As more crypto exchanges and wallets integrate this technology, the potential user base is expected to reach new heights, making it an increasingly important part of the crypto ecosystem.

However, the current state of adoption indicates that there is much room for growth and improvement. Especially to make the network more accessible and user-friendly for different participants.