Use of the transaction network has reportedly grown 1,200% in two years
Bitcoin’s layer 2 Lightning Network has grown by an estimated 1,212% in two years, with about 6.6 million routed transactions completed in August, a huge jump compared to the 503,000 transactions in August 2021, according to Bitcoin-only exchange River.
In a River report released on October 10, research analyst Sam Wouters clarified that the increase in routed transactions, which use three or more nodes to enable a transfer, came despite Bitcoin falling 44% and much less search interest online.
“Nobody is using Lightning’ should now be a dead meme,” said Wouters in an October 10 follow-up post on X (formerly Twitter), knocking Lightning critics.
“Nobody is using Lightning” should now be a dead meme.
Launching a new #Bitcoin report from @River: How the Lightning Network grew by 1212% in 2 years ⚡
It’s time to pay attention to the incredible work of so many people in the space 👇 Link below in the 🧵 pic.twitter.com/FuGLwGHR4R
— Sam Wouters (@SDWouters) October 10, 2023
The 6.6 million estimate for Lightning-routed transactions is a lower-bound figure based on the smallest possible value that River could assess. The company also received its 503,000 figure for August 2021 from a 2021 K33 study, formerly Arcane Research, and says it couldn’t estimate private Lightning transactions or those between only two parties.
$78.2 million in transactions were processed on Lightning in August 2023, an increase of 546% from August 2021’s $12.1 million estimate from K33. Wouters cited that Lightning is now processing no less than 47% of on-chain transactions in Bitcoin.
“This will be an interesting metric to monitor,” added Wouter. “It is an indicator of Bitcoin becoming more of a medium of exchange.”
The average Lightning transaction was about 44,700 satoshis or $11.84 in August 2023. River estimated there were between 279,000 and 1.1 million active Lightning users in September and attributes 27% of transaction growth to the streaming, social media tipping and gaming industries.
River’s data set consisted of 2.5 million transactions, with its nodes representing 29% of the network’s total capacity and 10% of all payment channels.
