REPORT | 4% of All Blockchain Developers Globally Are in Sub-Saharan Africa, Say...

A recent research study suggests that the increased adoption of Bitcoin as a transactional layer can be partially attributed to the growing number of cryptocurrency platforms joining the Lightning Network ecosystem.

This is demonstrated by the 40 million transactions settled on Bitcoin in the third quarter of 2023. However, the study conducted by Kaminari notes that only slightly over 6% of centralized crypto exchanges have integrated the layer 2 protocol into their platforms.

The data shows that the number of companies in the Lightning Network (LN) ecosystem has increased from 94 in October 2021 to 179 companies, covering 28 categories. Centralized cryptocurrency exchanges, including major platforms like Binance which integrated LN in July 2023, OKEx, and Bitstamp, have played a significant role in driving the increased adoption of the Lightning Network (LN).

2023 YEAR IN REVIEW

Only 6% of crypto exchanges have integrated the Lightning Network to conduct transactions with #Bitcoin .

14 crypto spot exchanges support Lightning compared to 211 without Lightning.@lightning pic.twitter.com/7gxyADDPcX

— BitKE (@BitcoinKE) January 14, 2024

Slightly over 6% of centralized cryptocurrency exchanges have integrated the layer 2 protocol into their platforms.

“There are currently 224 active centralized crypto exchanges, 14 of which are connected to the Lightning Network – in other words, only 6% of crypto exchanges currently use the Lightning Network to conduct transactions with Bitcoin,” says the Kaminari market research report.

Nonetheless, the study forecasts continued growth of Lightning use from the above platforms, in addition to the impending addition of the Lightning Network to Coinbase.

Crypto wallets, both custodial and non-custodial, are another significant growth factor for the Lightning Network (LN). However, similar to centralized crypto exchanges, the majority of crypto wallets have yet to integrate the LN. The report indicates that among the top 10 most popular wallets by user count, only two – Exodus and BitPay – have adopted the Layer 2 technology.

The research report anticipates upcoming developments such as RGB, a client-side validated state and smart contracts system operating on Layers 2 and 3 of the Bitcoin ecosystem, and the Taproot Assets protocols.

It suggests that these initiatives ‘will enable the creation of stablecoins compatible with the Lightning Network.’

These protocols are expected to contribute to the further evolution and capabilities of the Lightning Network ecosystem.

“This presents an opportunity for a significant migration of USDT transactions from Tron and Ethereum to the Lightning Network, potentially involving billions of dollars daily.”

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Cryptocurrency projects experienced 22,411 monthly active open-source developers in 2023, the latest developer analysis by Electric Capital shows.

While this number marked an overall 24% decrease in the number of developers, a resilient segment comprising seasoned developers with over 2 years of tenure and significant code contributions is on a steady rise.

According to the report by Electric Capital developers with more than 2 years of experience, reached an all-time high with an impressive 52% annualized growth over the past five years. However, the flip side reveals a stark contrast, as newcomers to the crypto space experienced a significant -52% YoY drop, raising questions about the factors influencing their entry and retention.

One of the most notable shifts is the industry’s move towards multi-chain development is that 30% of developers now support more than one blockchain, a tenfold increase from 2015. The trend extends further, with 17% of developers endorsing three or more chains in 2023, marking an all-time high.

This shift underscores the industry’s growing complexity and the need for developers to adapt to diverse blockchain ecosystems.

The growth in developer numbers is not uniform across projects, emphasizing a nuanced landscape where developers are discerning about the projects they choose to contribute to. This ‘voting with their feet’ phenomenon reflects a dynamic ecosystem where developers seek projects that provide real utility and align with their vision for the future of blockchain technology.

In a clear sign of decentralization, the global distribution of crypto developers is evident. The U.S, once a dominant player, has seen a 14% decline in developer share since 2018, now comprising only 26% of the crypto developer community.

Conversely, South Asia, Latin America, Eastern Europe, Western Africa, and Southern Europe collectively gained a 20% share of developers since 2018, emerging as new hubs for crypto innovation.

2023 CRYPTO DEVELOPER REPORT

South Asia, Latin America, Eastern Europe, Western Africa, and Southern Europe collectively grew developer share by +20% since 2018. pic.twitter.com/gICfC0mgc4

— BitKE (@BitcoinKE) January 19, 2024

The share of African developers increased by a percentage point from the 3% point reported in 2022.

As the crypto space continues to evolve, these trends highlight the industry’s resilience, diversification, and globalization. The decentralization of development talent and the rise of multi-chain development open doors to collaboration and cross-cultural exchange.

In this dynamic environment, the adaptability of developers and stakeholders alike will be crucial in navigating the ever-changing landscape of cryptocurrency and blockchain technology.

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