Lightning Network Hits Milestone 5,000 BTC
Bitcoin Lightning Network has reached a new capacity landmark with 5,000 BTC ($96 million) being implemented on the layer 2 protocol. The significance of this milestone should not be underestimated; it shows that bitcoin is increasingly being adapted into the marketplace as a payment system.
What is Lightning Network?
The primary value of bitcoin is its ability to transfer money around the world without third party intervention, such as a bank. However, in order to implement the process into the market, existing systems to be accessible and pragmatic for people to use.
This is where the Lightning Network (LN) comes in. LN was launched in 2018 as a layer 2 protocol built on top of the bitcoin layer 1 blockchain. It services peer-to-peer transactions. It uses nodes that are separate from the Bitcoin layer 1 protocol to facilitate transactions.
Lightning Network is currently the best solution for implementing bitcoin as a form of payment into the complexities of the global financial ecosystem. With a market cap of over $1 trillion, bitcoin has to be carefully implemented into the marketplace to facilitate transactions, all while maintaining security and scalability.
Rapid growth
Despite recently discovered security weaknesses, LN has thrived. It broke the barrier of 1,000 BTC in August of 2020 and has continued to quickly ramp up from there. In June of this year, LN surpassed 4,000 BTC before achieving the 5,000 BTC benchmark just four months later.
Image: courtesy, lookintobitcoin.com
Bitcoiners are effectively injecting more and more bitcoin at a faster rate than ever before into LN payment channels. The unprecedented benchmark of 5,000 BTC shows bitcoiners’ confidence in the payment system and its potential on the global stage.
Payment velocity
While the investment of 5,000 BTC into LN is a significant milestone, it is important to note the simultaneous growth of payment velocity per channel. With the investment of $96 million of BTC into LN, more payment channels have been created, giving more people the opportunity to use BTC as a form of payment.
While bitcoin is being adopted as a legal tender in some countries such as El Salvador and the Central African Republic, it is also being accepted more and more worldwide as a legitimate form of payment.
