Lightning Network Reaches Marathon 600 BTC Capacity (#GotBitcoin?)
The Lightning Network on Bitcoin passed a fresh milestone this week, taking its overall capacity to over 600 BTC ($2 million) for the first time. Lightning Network Reaches Marathon 600 BTC Capacity
Data from monitoring resource 1ML.com confirmed the achievement, which occurred early January 30. Lightning Network Reaches Marathon 600 BTC Capacity (#GotBitcoin?)
1 YEAR, $2 MILLION
The previous day proved to be particularly successful for the Bitcoin mainnet Lightning implementation, capacity growing by 21 BTC in 24 hours. Now with a total capacity of 601 BTC ($2,053,000), Lightning has added 15 percent over the past month.
Other metrics also showed improvements. The total node count now sits at 5768, the equivalent of a 16 percent monthly rise, while there are now 22,750 channels – 36 percent more than a month ago.
The news coincides with the increasing adoption of the technology. As Bitcoinist reported, an ongoing awareness campaign, Lightning Torch, aims to pass a transaction around the network, with each user adding to its size.
Beyond community-initiated projects, bonafide user-ready apps continue to bridge the gap between Lightning’s technical beginnings and mainstream understanding of its uses.
Bitcoinist released a two-part guide to the emerging ecosystem this week.
Lightning’s technical improvements go beyond bolstering Bitcoin’s ability to scale to meet the requirements of a significant influx of future users.
As Bitcoinist revealed this week, faster, cheaper transactions mean Lightning allows Bitcoin to become more effective than some altcoins designed to replace it.
Even with its limited reach, Lightning still processes more payments than altcoins at payments service Bitrefill, the company’s CEO said.
Taking Lightning to an altogether different audience this month meanwhile was Coin Center, which demonstrated the technology to the US Congress in the form of micro-transactions. The demo was made as part of a wider presentation on cryptocurrency by the group at the Congressional Blockchain Caucus.
“We were able to show the process of sending tiny amounts of bitcoin from our phones to the vending machine and watch it dispense candy in real time. The network fees were 1 satoshi per transaction,” Coin Center wrote in a follow-up blog post.
What Do You Think About The Lightning Network’s Capacity Increase?
Bitcoin’s Dropping Lightning Capacity Might Not Be a Bad Thing
The lightning network is supposed to be bitcoin’s superhero, taking the cryptocurrency to new heights by tackling its toughest and most obvious problem: if cryptocurrency is ever going to “go mainstream,” it needs to support a million times more transactions than it currently does – which is no easy feat.
But by the looks of this graph, lightning appears to be losing momentum. The amount of funds locked up in the layer-two network looks to be decreasing, seeming to indicate that fewer people are using it as a payment method. A lightning “channel” is like a gateway to the rest of the network, allowing a user to send a payment to any other user.
While lightning is still considered “beta” software, and thus risky to use, bitcoiners have been so enthusiastic about it and using it anyway, for games and beyond, chanting the unofficial slogan “reckless.” As lightning’s capacity increased rapidly over its first year, devotees cheered it on social media.
The catch is that, while this number is decreasing, lightning use might actually still be increasing because of increased privacy of lightning channels and other channel optimizations.
“There’s no way of knowing the capacity in [the lightning network]. We can only know the public channels’ capacity, not private,” Roy Sheinfeld, CEO of Breez told CoinDesk.
And at least one company says that – at least in their experience – lightning payments are picking up.
“We are doing increasing dollar value volumes on the lightning network. What I am seeing is the price going up and thus people need less coins locked up in channels to maintain spending power,” FastBitcoins MD Danny Brewster told CoinDesk.
A Tale Of Two Nodes
So, while so far watching this number has been a spectator sport — football for tech geeks — it might not be for much longer. This number will grow harder to track over time.
That’s because many lightning wallets do not advertise whether their channels exist to the rest of the network, by default.
Under the hood, there are “advertised” channels which advertise their existence to the rest of the lightning network and “non-advertised” channels which don’t. Normal channels, used by everyday users who just want to buy pizza and draw dicks online with lightning, don’t need to be advertised.
“Many wallets in the past few months have been released which default to non-advertised channels, these channels don’t show up on any public metrics, so relying on the public metrics alone only really shows half of the picture,” Lightning Labs CTO Laolu Osuntokun told CoinDesk.
Generally, advertised channels only need to be used by routing nodes, so the sturdier nodes that get payments from one person to another and need to be online all the time.
Zap creator Jack Mallers argued “it’s only responsible” that “anyone who isn’t a routing node [uses] private [“non-advertised”] channels.”
Some go as far as to argue that the public capacity is a “useless indicator” because it doesn’t capture all – or maybe even most – of the money in the lightning network.
Because more apps have been starting to follow these best practices, Sheinfeld guesses that “most” channels are private, noting that his wallet Breez has opened “thousands” of private channels just in the last couple of months alone.
“Breez opened thousands of private channels in the last two months. Lightning Labs auto-pilot also opens private channels,” he said.
This is one reason why many developers see lightning as providing more privacy than on-chain bitcoin transactions. While bitcoin has a reputation for giving users anonymity, transactions are actually public. Lightning hides a bit more of the transaction details.
“If a regular bitcoin transaction is similar to uploading your bank statement to a public web site, a lightning network transaction is similar to showing each merchant you pay how much money you have in one specific compartment of your wallet. You’re still revealing some information, but much less,” as lightning startup SuredBits wrote.
Another reason the capacity is decreasing is because some entities are closing down lightning channels that were wasteful.
“Based on my knowledge, the decrease in channels is simply node operators being rational by closing out channels that have been open for some time, but which don’t have notable forwarding activity,” Osuntokun said.
For instance, there’s one famous and mysterious anonymous lightning user by the name of LNBIG who has opened many lightning channels. They initially debuted by pouring 300 bitcoin into the lightning network, giving new meaning to lightning’s “reckless” catchphrase.
“At the beginning of my activity, I opened many channels in the hope that they will be used (and due to the imperfection of the autopilot),” the person behind LNBIG told CoinDesk.
But, the secretive developer said, those channels weren’t really used much at all. They were just open and sitting there.
“But time has shown that many channels have not been used once for two to four months, for example, and the funds in them are nonetheless blocked,” LNBIG continued.
The funds are “blocked,” as LNBIG puts it, because of the way lightning works. A lightning “channel” is like a gateway to the rest of the network, allowing a user to send a payment to any other user. But when someone opens a “channel” with someone else and doesn’t use it, then other people can’t use that gateway.
So, it makes sense to free up that capacity and wait to see if a new channel opens want to use the capacity, which is exactly what LNBIG decided to do.
LNBIG posted a Twitter poll before following through with closing these channels, arguing that the only downside would be the “psychological effect” that lightning’s capacity would fall down to 825 bitcoin.
As the decrease in lightning’s capacity shows, Twitter encouraged LNBIG to follow through.
Bitfinex Allows Lightning Network Shopping on Bitrefill With Bitcoin
Cryptocurrency exchange Bitfinex and crypto store Bitrefill partnered to allow the trading platform’s clients to shop with Bitcoin (BTC) over the Lightning Network.
According to a press release published on Dec. 4, Bitfinex users can instantly pay for a variety of services with Bitcoin that they hold on the exchange as of today.
A Lightning B2B Settlement System
Per the press release, the companies attribute the development to the “world’s first dynamic B2B settlement process over the Lightning Network.” The announcement builds on recent news that Bitfinex enabled Bitcoin Lightning Network transactions and that those using it for deposits and withdrawals will pay almost no fees. The companies explained that setting up such a system required some tinkering:
“Bitfinex and Bitrefill utilize customized versions of Lightning to open large channels together, exceeding the default limits in place, but allowing better flow and reliability to users.”
The collaboration between the two firms will allow the exchange’s customers to buy over 2,000 different prepaid vouchers with Bitcoin. The vouchers can cover the costs of services and products relevant to gaming, dining, entertainment, travel and more.
Lightning Adoption By Exchanges Is Essential
When Bitfinex users buy products from Bitrefill, the system put in place by the two firms instantly settles the payments over Lightning Network. Bitrefill chief commercial officer John Carvalho explained why he believes Lightning adoption among exchanges is important and where he thinks it will lead:
“We believe that getting Bitcoin exchanges on to the Lightning Network early is integral to preparing for the next wave of adoption and building out a parallel economy for Bitcoin. […] We will continue to work closely with Bitfinex and other businesses to develop Lightning solutions and products that make living on crypto a reality, eventually removing dependability on fiat rails.”
The Lightning Network sees increasing traction and adoption in the cryptocurrency space, with many placing high hopes on its potential to make Bitcoin a viable payment tool.
As Cointelegraph reported last month, bond market veteran Nik Bhatia says that Lightning Network convinced him of Bitcoin’s potential. Also in November, Bitcoin payments app Fold rolled out support for home-sharing giant Airbnb, effectively enabling to book stays included in the service with Lightning Network.
Lightning Network Reaches Marathon,Lightning Network Reaches Marathon,Lightning Network Reaches Marathon