The Bitcoin Lightning Network (LN) micropayment ecosystem is growing faster than its capacity. Analysts at Arcane Research drew attention to this.
The company noted that from April to September 2021, LN capacity grew exponentially – over this period, the indicator increased by 700%. However, then growth slowed to 40% year on year.
The rapid development of the LN ecosystem, which includes giants like McDonald’s and Starbucks, is explained by the legalization of bitcoin in El Salvador. Since last September, businesses operating in the country have been required to accept payments from Chivo digital wallets that are compatible with the Lightning Network.
In February 2022, the country’s authorities relaunched Chivo, improving the app’s user interface, fixing bugs, and adding improved LN support.
Since the beginning of 2022, LN capacity has increased by 7.4%, reaching 3551 BTC, according to Glassnode. At the same time, the number of nodes over the same period increased by more than 8%, exceeding 20,000. The efforts of companies like Spiral by Jack Dorsey and Synonym Software from Tether played a significant role in this.
Recall that in February 2022, the Chainalysis analytical platform added Lightning Network support to its transaction tracking solution.