When it comes to payment solutions in the crypto industry, which are of utmost importance to users due to the convenience they provide in carrying out transaction volumes, the Bitcoin Lightning Network has emerged as one of the best.
The Lightning Network is a Layer-2 payment solution provider hosted on the Bitcoin network that enables the transfer of digital assets quickly and conveniently worldwide.
According to widespread news firm CNBC, a Ukrainian refugee currently residing in Poland, Alena Vorobiova, used the Lightning Network to transfer some Bitcoin tokens worth $100, which were subsequently withdrawn from an ATM in the equivalent fiat currency – all in less than five minutes.
This affordable and convenient service has made the Bitcoin L2 payment system grow by 410% in terms of transaction volumes since last year.
More Reasons to Adopt Lightning Payments
Accordingly, Arcane Research also revealed that the number of payments recorded on the Lightning Network over the past year has doubled alongside the total value of the cost in terms of volume.
However, the report has cautioned about using public metrics to evaluate the adoption of the Lightning Network, adding that the size of the network is underestimated as the private channels and invisible nodes of the platform are not included in the measurements; hence its inaccuracies.
More importantly, the metrics are not a reflection of the natural world usage of the Lightning Network because a cursory look at the payment volume gives a clearer view of the accurate outcome of the Lightning adoption and use.
Lightning Becomes Accessible
Moreover, another explanation for the increased adoption of the Lightning Network is the number of users who have had access to the network over the past year. The accessibility happened via two apps: the U.S.-based payment provider, the Cash App, and the El Salvador-based Chivo Wallet.
As per the estimate from Arcane Research, about 100,000 users gained access to the Lightning payment system in August 2021. Fast forward to March 2022, more than 80 million users can now access payment on the network. This shows that the potential for a large user base is currently available.
Furthermore, the report also revealed that a substantial percentage (50%) of the value of payments came from peer-to-peer transactions.
On the other hand, about one-third of the payment value is from deposits and exchange withdrawals, while the remaining 20% is from purchases.
Even though the leading cryptocurrency, Bitcoin, was created to be a digital currency. But the snail-pace transaction process of the Bitcoin network means that an alternative is sought, hence the development of Layer-2 payment solutions.
As a result, the Lightning Network was created in March 2018 to provide a faster and more affordable Bitcoin transaction for individuals and businesses.
So far, Layer-2 has been a success in that it has addressed the pain points of users on the Bitcoin network as it looks to expand its services to other tokens in the future.