Lightning Network Bitcoin Capacity Grew by a Whopping 798% & Nodes by 196% in Past Year

  • In the past three months, the Bitcoin capacity has taken a big blow
  • 100% jump in BTC price might be to blame
  • From 901 in March 2018, we have reached 1,627 nodes

Lightning Network, the second layer on the Bitcoin blockchain has seen tremendous growth since January 2018.

As per the data noted by CoinShares, in the last year, Lightning Network’s Bitcoin capacity has jumped a dramatic 798%.

On September 1st, 2019, the second layer had 836 BTC capacity amounting to 8 million USD in comparison to Sep 1, 2018’s 93 BTC (658k USD).

However, in the past three months, the Bitcoin capacity has taken a big blow.

On May 9, 2019, Lightning Network reached its peak at 1,104 BTC capacity — amounting to $6.7 million at that point.

This is a drop of 24.2% in three months.

Source: BitcoinVisuals

As the chart shows, the cumulative Bitcoin capacity across all channels on Lightning Network has decreased these past three months.

This could be because of the surge in BTC price, 100% spike in price during the same period, that drove people to take their BTC off the network, possibly to sell them and take profit.

The second layer on the Bitcoin network expands its capabilities where lightning nodes open payment channels with each other, which are funded with Bitcoin. When transactions are made across these channels, the balance is reflected without broadcasting a transaction on chain.

Unlike BTC capacity, the nodes are constantly increasing in numbers.

From 1,627 nodes in 2018 on September 1st, we have jumped to 4,831 in 2019, seeing a jump of 196%. This number was much lower at 901 in March 2018.

However, not all is good in the Lightning land.

On August 30, an Australian software programmer Rusty Russell who is Lightning network coder ,warned users that

“security issues have been found in various Lightning projects which could cause loss of funds.”

The second layer Bitcoin scalability solution is meant to enable near-free and instant BTC payments.

He urged LN nodes operators to update their software as soon as possible.

“Full details will be released in 4 weeks (2019-09-27), please upgrade well before then,” he stated.

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