Bitcoin Lightning network capacity increases by over 25% in just 4 months
The price of Bitcoin (BTC) has been relatively stable this week, hovering around $20,000. The flagship cryptocurrency is expected to bounce back in the fourth quarter, but there is no guarantee. Despite the uncertainty, some positive developments have been made regarding the expansion and development of the Lightning Network. The Lightning Network is Bitcoin’s main scaling solution, designed to make transactions cheaper and faster.
Important takeaways
- Bitcoin has been trading below $20,000, staying in the same range as in previous weeks.
- There has been a positive development related to the Lightning Network, with Bitcoin’s lightning capacity of 5,000 BTC ($100 million).
- Several large firms have shown interest in Lightning Network, including MicroStrategy, which is looking for a full-time engineer.
The lightning network storms forward
Bitcoin’s Layer-2 Lightning Network solution has been the talk of the crypto town this week, with its capacity of 5,000 BTC ($100 million). This is just less than four months after the capacity reached 4000 BTC.
The Lighting Network is a scaling solution that allows transactions on the Bitcoin network to be faster and cheaper. With a larger Lightning Network capacity, more Bitcoin can be traded at higher speeds and with greater volume. It allows users to send Bitcoin (or satoshis, the smallest amount of a Bitcoin) to send or receive money faster and with lower fees. When the network has more capacity, it increases liquidity. The result is faster transaction speeds and potentially higher transaction volume for users.
The company behind the Lightning Network, Lightning Labs has also recently released a test version of new software that makes it possible to create and work with assets on Bitcoin. The software, called Taro, would allow stablecoins to be hosted on the network. With Lightning Network integration, it will allow them to be transferred across the scaling solutions for fast and cheap transactions.
Institutions Eye Lightning Network
Lightning Network’s successes have led to some large firms wanting to join. MicroStrategy is looking for a full-time Bitcoin Lightning Software Engineer to build a SaaS platform, sparking discussions in the market about institutions jumping on board.
Meanwhile, Lightning Network’s digital payments provider Strike has raised $80 million in a funding round led by Ten31 and joined by Washington University in St. Louis, the University of Wyoming and other investors. The financing indicates that companies and institutions also want a strong, new financing experience.
The bottom line
The Lightning Network’s successful 2022 is a good sign for the Bitcoin network. That could greatly help with the adoption of the cryptocurrency, which has occasionally been criticized for its inability to match existing payment solutions at scale. The Lightning Network development may not have an immediate impact on Bitcoin’s price, but it bodes well for the asset’s long-term future. Faster, cheaper transactions lead to greater usage, which in turn increases the asset’s value.
