Lightning Network Bitcoin Capacity Approaches $10 Million While Nodes Hits Above 9k
- The nodes on the second layer on Bitcoin network reaches 9,091
- Cryptocurrency exchange Bitstamp opens its own LN node while some nodes claimed 2.2 BTC in “justice transactions”
- Network capacity takes a drop, in inverse correlation with the BTC price
- The second layer on the biggest cryptocurrency Bitcoin, Lightning Network (LN) continues to grow as the number of nodes jump over 9,000.
According to the data provided by 1 ML, the number of nodes on this second layer has reached 9,091, seeing a spike of 2.90 percent.
Lightning Network is designed to enable fast and zero fee transactions by creating payment channels between users. The idea behind LN is to address the scalability problem of the Bitcoin network by keeping the majority of transactions off-chain.
Lightning Network Nodes Growing
Earlier this month, we saw cryptocurrency exchange Bitstamp setting up its own Lightning network node to boost the capabilities of the network and to encourage others to get on board.
“We believe the Lightning Network has the potential to unlock a whole new level of utility for Bitcoin,”
wrote Bitsampt on twitter.
Additionally, Bitcoin LN nodes earlier this week, claimed 2.2 BTC in “justice transactions” to dissuade potential thieves. A “justice transaction” is a punitive mechanism that involves closing a lightning channel suspected to be attempting theft.
“[B]y design, when a thief attempts to steal funds on the lightning network, if caught, they do not only lose the money they tried to steal, they lose all the funds in the relevant channel. This ‘punishment’ is expected to act as a deterrent and is sometimes called ‘justice’,”
stated BiMEX report.
Meanwhile, Blockstream has announced the release of c-lightning version 0.7.1, bringing several technical advances to make LN faster and more efficient.
We're excited to announce #clightning 0.7.1. This point release includes gossip improvements, longer default invoice timeouts, external-wallet channel funding, more powerful plugin support, better peer error handling, and performance improvements! ⚡️🔌 https://t.co/ir9QCXcWKS pic.twitter.com/7LIncSqmdp
— Blockstream (@Blockstream) July 17, 2019
Network Capacity Takes a Hit
While the nodes are increasing, the network capacity has decreased 2 percent, going down to 923.09 BTC equivalent of USD $9,780,837.
LN Bitcoin network capacity drops, BTC value (blue) & USD (Orange), Source: bitcoinvisuals.com
The network capacity of LN is in inverse correlation with the surge in Bitcoin price, indicating that some nodes might have closed their channels to sell Bitcoin at the recent top.
During this period, the USD value of the Bitcoin Lightning Network actually increased to exceed $10 million. Currently, we have dropped a few thousand in USD.
Another reason for the diminishing capacity had been a single node shutting down its unused channel.
However, the bigger picture shows a continuous uptrend as LN enters its second year. The network is seeing strong growth and is likely to further grow in adoption.