March 28, 2024

Bitcoin Lightning Blockchain Network Channel Bandwidth Reaches Another Record

Public channel capacity on the Lightning Network continues to grow, reaching another record highmaximum of 2738 bitcoins.The Lightning Network is a tier 2 scaling solution built on top of the underlying Bitcoin blockchain that allows two peers to open a channel between themselves and postpone a final settlement in the future.

</p>

The Lightning Network White Paper was firstpresented back in January 2016 as an experimental idea, as the base layer of bitcoin has limited bandwidth, which was and remains necessary to maintain sufficient decentralization of the network (the larger the block size, the higher the cost of running your own node).

Lightning Network Bandwidth

Although the network functions usingpayment channels open between two peers, public channels and node interconnection allow payments to be routed through other Lightning nodes in the network, which can selectively choose which fees are charged and to whom on the network they are connected.

The Lightning Network also allows peer-to-peer private channels, but this balance is not visible.

Over the past three months, the Lightning Networkhas seen impressive growth, most likely due in part to the adoption of Bitcoin as legal tender by El Salvador, with the Lightning Network playing an important role in the adaptation process.

On average, over the past three months, the throughput of public channels in the network has grown by 12.5 BTC per day.

Lightning Network Throughput (BTC)

Similar to the base layer of the Bitcoin blockchain, the best solution for scaling the Lighting Network is the underlying Bitcoin Continuous Growth Technology, or as it is commonly referred to"Number Go Up": As additional people, institutions, and states decideUsing the Bitcoin money network, the fixed supply of the asset means that the underlying BTC/USD exchange rate must rise, which in itself increasesnetwork bandwidth.

The bandwidth of public channels is notis only becoming parabolic, but the exponential rise in the price of bitcoin since Lightning first began mass beta testing in early 2018 has seen network bandwidth skyrocketing in dollar terms.

Lightning Network throughput (USD) at linear scale

Above is the public channel bandwidth on a linear scale, and below is the same chart on a log scale for context:

Lightning Network throughput (dollars) in logarithmic scale

Since the security model of the Bitcoin networkcontinues to programmatically move to a fee-based model (as the trend of new bitcoin issuance tends to zero), it is likely that fees will rise substantially as demand for block space continues to rise as bitcoin adoption increases. Below is the ratio of miners' revenue generated from the release of a new offer and transaction fees for all time:

Miner Income Ratio (30-Day Moving Average)

This trend is extremely important for the implementation of LightingNetwork. Probably, on the other side of hyperbitcoinization, most people will not be transacting through the underlying layer of the Bitcoin blockchain, but rather through second-tier solutions such as Lightning.

 

BitNews disclaims responsibility forany investment recommendations that may be contained in this article. All opinions expressed express exclusively the personal opinions of the author and respondents. Any actions related to investment and trading in crypto markets involve the risk of losing invested funds. Based on the data provided, you make investment decisions carefully, responsibly and at your own risk.

</p>