The adoption of the bitcoin lightning network has been on the rise for a while now. This was especially pronounced during the multiple bull rallies of 2021. It triggered an accelerated rate of adoption. Thus leading to network congestion due to all of the new users moving in. Naturally, transaction fees had risen while confirmation times had slowed. The lightning network preferred a solution to this by not being only faster but cheaper at the same time.
Capacity Grows To ATH
The bitcoin lightning network capacity had been tethering around 1,000 BTC by this time last year. Mostly because users were still comfortable transacting on the bitcoin network and confirmation times were reasonable. However, with massive adoption came the need for more capacity. The move to the bitcoin lightning network was accelerated by significant events in the space such as El Salvador making the cryptocurrency a legal tender.
Related Reading | JP Morgan CEO Says More Pain Ahead For Bitcoin, Ethereum, Cardano Investors
Since then, the growth of the bitcoin lightning network has been apparent. By December 2021, the lightning network capacity had more than doubled to be sitting above 3,000 BTC. Being a layer 2 solution, it was speculated that its capacity would hit a peak and start declining but that would not be the case.
By April 2022, the lightning network capacity had grown to more than 3,600 BTC. Since it allows users to carry out micro-transactions with very little transaction fees, more users are opting to use the lightning network for their transactions, hence the 9% growth that has been recorded in less than two months.
Lightning network capacity reaches new high | Source: Arcane Research
As of June 5th, the bitcoin lightning network capacity was sitting at 3,950. This growth rate indicates that more bitcoin users and investors are choosing to use the layer 2 solutions to carry out transactions off-chain.
More In Store For Bitcoin Lightning Network?
The bitcoin lightning network has been around for a while now and like a lot of layer 2 roll-up solutions, has taken some time to catch on. However, what has been observed with solutions like these has been their accelerated growth rate once they have been tried and tested by users in the space.
BTC price recovers above $30,000 | Source: BTCUSD on TradingView.com
This is actually evident in the growth trend of the lightning network. Even after bottoming out at the start of the year, it has been able to pick back up, growing 6% in the month of May alone. This is the fastest growth rate recorded since October if 2021. It also translates to a 100% yearly growth rate in lightning network adoption.
Related Reading | The Bottom May Not Be In, But How Low Can Bitcoin Go?
Although the bear market has been affecting the adoption of bitcoin, those already in the space continue to look towards other ways of carrying out cheap transactions. If the growth over the past month is anything to go by, then the lightning network capacity could be gearing for another run like the one recorded in the summer of 2021.
Featured image from The Coin Republic, charts from Arcane Research and TradingView.com
Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…
