The Lightning Network Saw Significant Growth in 2019, But It Has Yet to Achieve Retail Adoption

January 13, 2020 / by Crypto.IQ

The Lightning Network has seen significant growth during 2019, with the number of unique channels rising from 14,700 to 28,000, while simultaneously the network capacity rose from 525 Bitcoins (BTC) to 850 Bitcoins (BTC) according to data from Bitcoin Visuals.

BitMEX research conducted an in-depth analysis of the Lightning Network, and found that non-cooperative channel closures were between 60,000 and 90,000, much higher than the expected number around 30,000. A non-cooperative channel closure is when a Lightning node closes a channel without informing the other node it is connected to.

This is both a good and a bad thing according to BitMEX research. The good news is the larger amount of non-cooperative channel closures may indicate that mobile experimentation with the Lightning Network is more prevalent than expected. The bad news is this may indicate that the scalability and privacy benefits of the Lightning Network are less than expected.

Beyond this result, BitMEX research estimates 3,870 Bitcoins (BTC) have flown into the Lightning Network since its inception. Although this is a significant amount of money, somewhere in the tens of millions of dollars range, BitMEX thinks this is all from technologists and hobbyists rather than being driven by retail adoption.

The silver lining to all of this is that Lightning Network adoption and experimentation is increasing, and there is plenty of potential for the Lightning Network to become a retail solution for Bitcoin (BTC) in 2020.