The Lightning Network grew by 1212% in 2 years

Why it's time to pay attention(report by River)

For the Lightning Network to achieve its full potential in helping Bitcoin scale to more users, it is important that observers have an accurate understanding of activity on the network. Undocumented activity does not attract investors, nor does it help developers to get funding so they can continue to improve all aspects of the network. 

There are no public metrics on how many people use Lightning, so critics point at metrics such as node count, channels, and capacity, which have plateaued over the past year and thus give a false impression that Lightning’s adoption may be stagnating or declining. In this report, River show how the number of users, transactions, and volume have been accelerating significantly over the past years. They also share some River-specific insights and discuss significant growth accelerators for the Lightning Network.

Abstract:

“Based on data from the operators of nodes comprising 52% of the public capacity on the Lightning Network, we estimate a lower bound of 6.6 million routed Lightning transactions in August 2023. The upper bound could be a multiple of this number if there was data availability of direct and private transactions between participants.

This represents a 1,212% increase since the 503k Lightning payments estimate for August 2021 by K33 (formerly Arcane Research). This growth was despite a 44% Bitcoin price drop and a 45% decrease in search interest. 

It is the equivalent of 2.5 transactions per second, compared to Bitcoin’s on-chain average of 4.4 TPS and K33’s August 2021 benchmark of 0.2 TPS. 

Due to the architecture of the network, it is not possible to estimate an upper bound, as direct transactions between only two participants, and private transactions can not be estimated. 

The primary use cases driving transaction growth that we identified are gaming, social media tipping, and streaming, driving 27% of all growth.

October 2023

River Research Report: Lightning – Why it’s time to pay attention (October, 2023)