The Bitcoin price has entered a steep decline in 2018, leaving many recent investors heading for the exits to cut their losses. Behind the scenes, though, Bitcoin development continues to plug along without regard for market movements, and one much-anticipated technology -- the Lightning Network…
The Bitcoin price has entered a steep decline in 2018, leaving many recent investors heading for the exits to cut their losses. Behind the scenes, though, Bitcoin development continues to plug along without regard for market movements, and one much-anticipated technology — the Lightning Network (LN) — has quietly passed a major milestone.
Earlier this week, the number of open LN payment channels reached 1,000 for the first time. This marked yet another historic checkpoint for the development and adoption of this nascent technology, which many developers could be one of several long-term solutions to Bitcoin’s network congestion, which has reduced the most prominent cryptocurrency’s utility for small-value transactions and led many companies — including payment processor Stripe — to abandon support for Bitcoin payments.
The Lightning Network promises to ease network congestion by moving transactions off the main blockchain and onto the second-layer LN protocol. Using payment channels, LN users will be able to make near-instant transactions at virtually no cost, which proponents argue will make Bitcoin an attractive medium of exchange for transactions of all sizes.
Although Lightning Network software is still firmly in the alpha testing phase, enthusiastic users have nevertheless begun setting up LN nodes on the Bitcoin mainnet and opening payment channels with one another. As of the time of writing, there were already 419 nodes running LN software on the mainnet, up from fewer than 30 on Jan. 17.
For reference, Bitcoin Cash — the fourth-largest cryptocurrency by market cap — has 1,171 active nodes (excluding duplicate and non-listening clients), less than three times more that of the alpha-stage LN.
Lightning adoption has passed several other notable milestones in recent weeks, as brave users have risked mainnet BTC to help speed the development of this promising technology.
In January, TorGuard began accepting mainnet LN payments for its VPN service, and the company later marked the Lightning Network’s “pizza transaction” when it allowed a brave user to pay for a physical item using an LN payment.
Earlier this week, meanwhile, Austria-based startup Coinfinity completed what is believed to be the first LN transaction on a Bitcoin ATM.
Featured image from Shutterstock.
Last modified: January 24, 2020 11:16 PM UTC