Bitcoin’s Layer 2 Lightning network saw an estimated growth of 1,212% in two years, with around 6.6 million transactions routed in August, a significant increase compared to the 503,000 transitions in August 2021, according to Bitcoin-only data (BTC) exchange River.
In a report on October 10, River Research analyst Sam Wouters explained that the increase in routed transactions – which use more than two nodes to enable a transfer – despite a 44 percent drop in the price of Bitcoin and a significant lower online search interest occurred.
“’Nobody uses Lightning’ should be a dead meme now,” Wouters said in a follow-up post on X (Twitter) on October 10, taking a dig at Lightning critics.
“Nobody uses Lightning” should now be a dead meme.
Releasing a new #Bitcoin report from @River: How the Lightning Network grew 1212% in 2 years ⚡
It’s time to pay attention to the incredible work of so many people in space. Link below in pic.twitter.com/FuGLwGHR4R
— Sam Wouters (@SDWouters) October 10, 2023
River’s figure of 6.6 million for Lightning-routed transactions is a low estimate – the lowest possible value the company could determine. The company also sourced the August 2021 figure of 503,000 from a 2021 study by K33, formerly Arcane Research, adding that it cannot evaluate private Lightning transactions or those between just two participants.
Estimated growth in Bitcoin Lightning transactions routed monthly. Source: River
August 2023 also saw $78.2 million in transaction volume processed on Lightning, a 546% increase over the August 2021 value of $12.1 million tracked by K33. Wouters noted that Lightning now handles at least 47% of Bitcoin’s on-chain transactions.
“This will be an interesting metric to monitor,” he added. “It is an indicator that Bitcoin is becoming more and more a medium of exchange.”
Estimated growth in Bitcoin Lightning transaction volume routed monthly. Source: River
In August 2023, the average Lightning transaction size was about 44,700 satoshis or $11.84. River estimates that between 279,000 and 1.1 million Lightning users were active in September.
The company attributed 27% of transaction growth to gaming, social media typing and streaming.
Related: Coinbase integrates Bitcoin Lightning Network: CEO Brian Armstrong
River said the success rate for Lightning payments on its platform was 99.7% across 308,000 transactions in August 2023. The main reason for the failure is that no payment method can be found that has enough liquidity to enable the transfer.
River’s dataset consisted of 2.5 million transactions. The nodes in River’s dataset represent 29% of the total capacity in the network and 10% of the payment channels.
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