According to statistics from Bitcoin Visuals, the Bitcoin Lightning Network capacity has hit an all-time high of 3915.776 BTC ($113 million), proving the popularity of the Layer 2 scaling solution for Bitcoin.
The capacity of the Bitcoin Lightning Network has reached an all-time high of 3,915.776 BTC – image from bitcoinvisuals.com.
Initially introduced in 2018 to solve Bitcoin’s scalability difficulties, the Lightning Network has since been able to sustain an upward trend in increasing its capacity.
However, on April 18th, the growth was temporarily halted when network capacity fell 67% in a week, from 3699.471 to 1,834.977 BTC on April 25th.
Lightning Network capacity fell 67% in a week, from 3699.471 to 1,834.977 BTC on April 25th – image from bitcoinvisuals.com.
However, the decline was quickly followed by a return to 3,628.639 BTC on April 26th.
The Lightning Network is a Layer 2 scaling solution built on top of the Bitcoin network, developed to scale Bitcoin by taking transactions off of the main blockchain and using payment channels to conduct off-chain transactions.
Being a layer 2 solution means it was constructed independently from the Bitcoin network, yet it communicates with it.
It is composed of a network of channels that make it possible for individuals and businesses to transfer money to and from one another without utilizing the blockchain to validate the transaction.
Transactions are typically done utilizing QR codes rather than complicated public keys, allowing speedier payments and reduced costs. This changes implies that tens of thousands, if not hundreds of thousands, of transactions, may be completed in a matter of seconds, making it ideal for minor transactions.
In closing, the Lightning Network enables faster and almost zero-fee Bitcoin transactions via off-chain payment channels.
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