Bitcoin Lightning Network Capacity Up 25% in the Last 4 Months

The Bitcoin Lightning Network holds over 5,000 BTC ($96 million) as more people use the layer 2 scaling solution to transfer bitcoin.

In June 2022, the network capacity hit 4,000 BTC, indicating increased growth despite the ongoing bear market. The increasing capacity is good for users since it leads to faster transaction speeds and sizes.

The Lightning Network has grown by over 25% in just 4 months @lightning pic.twitter.com/cTvyysmndv

— BitKE (@BitcoinKE) October 5, 2022

Despite a decline since May 2022, the number of nodes supporting the network has also been growing steadily and currently stands at just over 17,000 nodes:

Advantages of the network include:

• Instant payment – Payment speed measured in milliseconds to seconds
• Scalability – Capable of millions to billions of transactions per second across the bitcoin network
• Low fees
• Cross blockchains

The Lightning network was designed to scale the bitcoin network’s main layer. This layer is slow, built for security and size rather than speed. Lightning has its own set of rules, separate from the main Layer 1 blockchain, allowing for much faster payments and much lower fees.

Lightning does this by opening up channels off the main bitcoin blockchain where transactions occur. The resulting balances following those transactions can be seen between the parties without the balances having to be broadcast on the main bitcoin blockchain until a later time when the channel is ready to be closed.

By transacting and settling off-blockchain, the Lightning Network allows for exceptionally low fees, which enables for emerging use cases such as instant micropayments. With smart contracts, Lightning can settle the final balance of those payments into the base layer while ensuring that all transactions abide by the rules of the protocol.

Here is a demo video and discussion on how the Lightning Network works:

Finally, as long as the chains can support the same cryptographic hash function, it is possible to make transactions across blockchains without trust in 3rd party custodians.

If you want to experiment with the network, you can try it using these wallet services:

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The Bank of Ghana has been rolling out offline tests of its upcoming CBDC in markets and towns within the country where it has gained several key insights on how the eCedi can benefit local people.

The testing happened in a town called Sefwi Asafo, where participants were able to buy products and services from merchants in all kinds of places without any internet connectivity.

One of the insights the Bank of Ghana picked is the eCedi will lead to user-generated data which can assist in providing loans to regular people, according to Kwame Oppong, the Director of FinTech and Innovation at Bank of Ghana.

Live on the main stage: Stablecoin, crypto & CBDC, Risks and opportunities for Ghana featuring @CarmelleCadet, Founder @emtech_inc, Kwame Oppong, Head of Fintech & Innovation, @thebankofghana and Viv Diwakar, Director of Technology @HBAR_foundation #AMDSGH pic.twitter.com/EytJfdxuxq

— Africa Money & DeFi Summit (@AfricaMoneyDefi) September 27, 2022

According to Oppong, who leads the eCedi project, if people make their activity data available, they can become more eligible for loans.

Oppong spoke on the sidelines of the West Africa Money and Decentralised Finance (Defi) Summit where 50 multinational financial technology companies and 400 delegates from various financial technology companies converged in Accra, Ghana.

The CBDC would also introduce instant settlement of transactions which will bring about a cost-saving benefit when compared to the current settlement infrastructure.  The official however reiterated that most countries are still learning and testing CBDCs adding that ‘we need to determine whether it’s useful for us or not.’

When it comes to other digital currencies, the official noted that one of the most attractive qualities of cryptocurrencies is its user experience, hence a lot of countries are studying blockchain technology and its potential use cases.

Oppong also indicated that stablecoins can play a strong role in enabling cross-border transactions. At the moment, Ghana is not considering regulating cryptocurrencies, said Oppong.

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