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As use case appeal strengthens, the Lightning Network is now at an all-time high of over 5,490 BTC or $128 million in capacity.
According to reports, the Lightning Network recently attained an all-time high as Bitcoin continues to rally. According to The Block, the amount of BTC locked in the Bitcoin (BTC) payments network reached a record high, with the Layer 2 network’s capacity growing by more than 5,490 BTC. This increment, which translates to $128 million, is up from the 3,350 BTC recorded early last year.
Lightning Network All-time High Seen as Positive Sign for Bitcoin Transaction Adoption
Recorded data reveals that the Lightning Network is up 63% since the beginning of 2022. This development is viewed as a positive sign for adopting Bitcoin transactions within the crypto space.
Lightning Network’s growth capacity coincides with Bitcoin’s short-term rally, as the crypto has surged 38% since January. As of press time, it was changing hands at $22,896. Although this figure is encouraging, it is still 66% off Bitcoin’s November 2021 record high of roughly $70K.
Appealing Prospect for Cross-Border Payments
Individuals and businesses find the Lightning Network attractive, given its ability to mitigate the Bitcoin mainnet issues. For instance, integrating BTC payments in El Salvador was possible through a Lightning Network-based payment service called Strike. As of early December, Strike also facilitated US payments to three African countries: Nigeria, Ghana, and Kenya.
Speaking on the African payment development at the time, Strike founder and chief executive officer Jack Mallers explained:
“High fees, slow settlement, and lack of innovation in cross-border payments have negatively impacted the developing world. With exorbitant fees to transfer funds in and out of Africa and incumbent providers halting services, payments companies are struggling to operate in Africa and people cannot send money home to their family members. Strike offers an opportunity for people to transfer their US dollars easily and instantly across borders.”
Strike also revealed its intent to further its African endeavors by exploring partnerships and integrations. At the time, the platform was considering collaborating with Chipper Cash, an African peer-to-peer and cross-border payment service provider.
In 2021, social media giant Twitter adopted the Lightning Network in order to enable BTC tips. At the time, Twitter rolled out Bitcoin tipping for its iOS users through Lightning and also set its sights on a similar NFT scheme. However, the prominent microblogging platform noted that it was still early days for its proposed NFT authentication feature.
As a layer 2 payment protocol, the Lightning Network, built atop the Bitcoin protocol, facilitates fast and cheap micropayments. The payment protocol achieves this by allowing participants to transact directly without needing immediate settlement on the blockchain. Furthermore, the Lightning Network operates as a bi-directional payment channel network between participants, allowing the eventual settlement of off-chain transactions on the BTC blockchain.
Amid its current all-time high development, the Lightning Network was specifically designed to lessen the issues experienced on the Bitcoin mainnet. By allowing users to open payment channels between themselves, this remittance network enables such channels to address high amounts of low-value transfers. In addition, the Lightning Network handles such low transaction speeds and high fees without broadcasting every transaction to the BTC main network.