Bitcoin Lightning Network adoption gets a boost with the introduction of US dollar payments. and decentralized social media platform Nostr.
The capacity of Bitcoin’s Lightning Network (LN) recently passed the record of 5,000 Bitcoin
The Lightning Network is a neutral protocol built on top of Bitcoin, and currently does not have a “native” token associated with it like many decentralized financial (DeFi) platforms.
Although the total amount of Lightning Network is less than 0.5% of Ether
with DeFi contracts, the upward trend in Bitcoin’s LN capacity versus the downward trend in the amount of ETH locked in smart contracts is encouraging for LN development.
Although the amount of roaming on LN has increased consistently, the number of channels on the peer-to-peer network dropped significantly in November following the FTX collapse. It may be due to migration of miners using LN nodes without running mining clients.
However, the end of potential miner surrender and the rise of Bitcoin-based applications such as immutable tokens may mark the end of LN channel surrender. Since early 2023, over 2,000 new channels have been added to the network.
A Valkyrie Investments report says LN adoption is gaining momentum in emerging markets such as South America and Africa, primarily due to LN Strike’s mobile payment app initiative.
In December 2022, the firm launched an LN-based money transfer service in Africa. The service offers free transfers from the US to Africans in Nigeria, Ghana and Kenya. Later, Strike announced a similar program in the Philippines.
Recently, the firm introduced dollar payments using LN, where users can send dollars from Strike cash balances to savings and Visa-enabled accounts. The tool will convert to US dollars. to BTC later and converted to dollars at the destination. Since LN is faster and cheaper, the risk due to Bitcoin’s price volatility is minimal.
The cost of international payments from the US can reach $45 per transaction, with transfers taking hours or sometimes days. Thus, users may begin to prefer strike-based payments over traditional remittance channels.
A recent report by Marty Bent found that LN fees have risen this year on one of the top Lightning Network wallets, Wallet of Satoshi. Also, Podcasting 2.0 – the podcasting platform that accepts LN fees – has also seen an increase in tips sent to creators.
Nostr increases LN uptake
Another factor affecting LN adoption is the introduction of Nostr. According to the protocol’s GitHub page, Nostr is a simple, open protocol that enables global, decentralized, censorship-proof social media. The protocol allows social media applications to be built on top of it.
Damus, a Twitter competitor, is built on Nostr and has an iOS and Android app. The idea of an open, free social media network resonates strongly in the crypto space, with Bitcoin pioneers such as Jack Dorsey and Adam Back strongly supporting Nostr.
In addition to their ideological similarities, Nostr can increase LN adoption, as Damus has integrated various LN wallets such as Wallet of Satoshi, Strike, BlueWallet and others. According to a report by LN analyst Kevin Rooke, more than 600,000 users have subscribed to Nostr. This can help users onboard LN, as Nostr supports the Bitcoin payment network through Nostr Zap.
Although LN has no origin token, the LN nodes will likely earn fees to facilitate transactions and provide liquidity. In the current state, however, salary is irrelevant. So the growth of the Lightning Network seems natural, and it is well positioned to become the leading global payment network – as prominent figures in the space have predicted.