While things are rather bleak on the Bitcoin market due to the macroeconomic situation, the cryptocurrency is picking up speed elsewhere. We’re talking about the Lightning network. Bitcoin (BTC) Layer Two network capacity is hitting a new all-time high as of today (June 7). At 3,970 BTC, liquidity in Bitcoin’s scaling solution has never been higher.
Converted into US dollars (USD), the capacity is “only” 117 million USD. Dollar liquidity is 45 percent below its all-time high of $216 million. The reason is, of course, the rapid loss in price on the Bitcoin market. After all, the No. 1 cryptocurrency is currently trading 57 percent below its all-time high of USD 69,000. Also today, Tuesday, BTC has to accept a daily loss of 5.6 percent. Bitcoin is trading at $29,501 at press time.
The Lightning Network’s all-time high is a clear indication that the market is believing the promises of the scaling solution. This is not a matter of course, as the network has only existed for four years and is technically quite complex.
Network effects provide a growth spurt
However, it should also be emphasized that the capacity of the network does not grow linearly, but exponentially – as can be seen in the graphic. The background are so-called network effects, which mean that the value of the network increases exponentially with each new participant. You can find out more about it in the podcast with Alex von Frankenberg.
Recently, institutional interest had also increased significantly. BTC entrepreneur Jack Mallers had a cooperation with the e-commerce giant at the Bitcoin 2022 Conference in Miami, USA Shopify announced. Accordingly, Shopify integrates with the help of Maller’s company Strike Lightning payments into the point-of-sale system of Shopify customers who want to offer the service.
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