Bitcoin: the rapid growth of Lightning Network as payment channel

Bitcoin has been criticized several times for the scalability issues that had and that has been trying to solve. But it is also important to mention when the solutions that developers are implementing are giving good results. The Lightning Network (LN) is one of the major changes that will be implemented to Bitcoin and will allow it to properly scale.

Over the past few months, thousands of new payment channels have been established, signalling a major step in the right direction toward mass adoption of this new technology.

Scaling Bitcoin to offer instant and cheap transactions requires major developments. This code upgrade is known as the Lightning Network. It allows users to open direct payment channels between one another on a global scale. Doing so requires the necessary network participation. Without sufficient support, the Lightning Network will not make any meaningful impact.

Earlier this year, things did not look all that promising. Just 89 channels existed on January 19th. To some people, it showed how this scaling solution is unfeasible. Others considered it to be a lack of adoption because the technology is still not finished. Instead, it is being tested under open beta rules and caution remains advised at all times.

Fast forward to a few days ago, and the number of channels has grown significantly. As of May 24th, over 6,600 direct connections exist. It is still a drop in the proverbial bucket when looking at the financial sector. However, it also confirms there is genuine interest in this technology. Scaling Bitcoin will remain an ongoing process for some time to come. These numbers may look very different a year from today.

Even though this growth is impressive, not everyone is convinced. Until the Lightning Network technology is fully developed, adoption will remain relatively low. Various important aspects still need to be implemented. There is no double-sided funding, no watching for offline transfers, and so forth.

All of these issues will – hopefully – be addressed by the developers in the future. Most small and traditional purchases do not necessarily require all of those advanced features. However, the current implementation of the Lightning Network will not necessarily suit everyone. Giving users a lot of different options will remain one of the top priorities.

After nearly nine years of development, it seems things are finally looking up for Bitcoin. Scalability has always been the Achilles heel of the world’s leading cryptocurrency. Developers have also been trying to solve some problems related to the privacy of the transactions and some other minor details which are now being addressed.

The LN aims to become a new payment ecosystem that would be capable of handling a surprisingly high number of transactions without congesting the Bitcoin network. In the next weeks and months, the number of nodes is expected to keep growing and we could have some favourable news about when the LN could be released.