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The Lightning Network (LN) — Bitcoin’s layer two off-chain scaling solution and bidirectional payment network — has reached roughly $2 million in capacity (441.23 BTC sum of channel values) and approximately 15.8k open channels despite the recent market downtrend.  

Both the sum of the channel values and the number of open channels surged significantly since 11/17. Channels sums jumped from roughly 154 BTC to 441 BTC over the last four days, and the number of open channels increased from 13.4k to 15.8k over the same period.

Increasing LN Activity

The increasing LN capacity and the number of open channels comes at the same time as the recent downturn in the cryptocurrency market, particularly mirroring Bitcoin’s volatility following weeks of subdued market activity. Deriving a leading cause of this countertrend is difficult, but there have been some notable developments in the LN over the last month.

IndieSquare officially announced their integration of the LN with a Unity SDK backed by BTCPay server. This is a significant achievement for Unity game developers, who can now create In-App-Purchases and In-Game-Shop functions using the LN as the payment method. BTCPay server is a popular open-source cryptocurrency payment processor using a non-custodial invoicing system where a developer can own their payment processor server, rather than relying on third-party services like BitPay.

Lightning Labs also announced the Neutrino Protocol — a Bitcoin and LN light client for mobile phones — in the middle of October. While still an experimental light client, an uptick in adoption of the client may be contributing to increasing LN nodes opening.

Additionally, the proliferation of hardware and user-friendly products like Casa’s Lightning Node may also be a driving factor in increasing LN capacity. Adoption of new technologies is facilitated by products that assist in reducing the barrier to entry, and Casa’s Lightning Node — although available since September — could be gaining traction among more mainstream users looking to jump into the LN.

Low Volatility and Recent Downturn Good for Development

Significant attention — especially in the mainstream media — is always afforded to the prices in the cryptocurrency markets. However, during periods of low volatility and bear market sentiment, developments on the technical side — both back-end and front-end UI — are abundant. Many developers often view these periods as vital to the growth of the technology as speculation on prices only fuels negative attention and outsized misdiagnosis of the industry by mainstream pundits.

The Lightning Network has come a long way since earlier in the year. With exceedingly user-friendly node hardware and software tools at the disposal of mainstream users and developers building innovative products like submarine swaps and the neutrino client, the future of the LN looks bright.

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